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THE  CAUSE  AND  EXTENT  OF  THE  RECENT  INDUS- 
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THE  CAUSES  OF  THE  PANIC  OF  1893.  By  William  J. 
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VII 

INDUSTRIAL  ACCIDENTS  AND 
THEIR  COMPENSATION 


INDUSTRIAL  ACCIDENTS 
AND 

THEIR  COMPENSATION 


BY 

GILBERT  LEWIS  CAMPBELL,  B.  S. 

(NORTHWESTERN   UNIVERSITY,  1909) 

Field  House  Director,  Armour  Square  (South  Park 

System),  Chicago ;  and  Graduate  Student 

in  the  University  of  Chicago 


BOSTON  AND  NEW  YOEK 

HOUGHTON  MIFFLIN  COMPANY 

(Iftc  JUiberjSiDe  ptc^^  Cambtitige 

1911 


COPYRIGHT,    191 1,   BY   HART,   SCHAFFNER   &   MARX 
ALL    RIGHTS   RESERVED 

I'uMished  January  iqzi 


HD 
7/01 

Cl5 

PREFACE 

This  series  of  books  owes  its  existence  to  the 
generosity  of  Messrs.  Hart,  Schaffner,  and 
Marx  of  Chicago,  who  have  shown  a  special 
interest  in  trying  to  draw  the  attention  of 
American  youth  to  the  study  of  economic  and 
commercial  subjects,  and  to  encourage  the 
best  thinking  of  the  country  to  investigate 
the  problems  which  vitally  affect  the  business 
world  of  to-day.  For  this  purpose  they  have 
delegated  to  the  undersigned  Committee  the 
task  of  selecting  topics,  making  all  announce- 
ments, and  awarding  prizes  annually  for  those 
who  wish  to  compete. 

In  the  year  ending  June  1,  1909,  the  follow- 
ing topics  were  assigned :  — 

1.  German  and  American  methods  of  regu- 
lating trusts. 

2.  The  logic  of  "Progress  and  Poverty.'* 

3.  What  are  the  ultimate  ends  of  trade- 
unions,  and  can  these  be  gained  by  any  appli- 
cation of  the  principles  of  monopoly? 

4.  In  view  of  the  existing  railway  progress, 
should  the  United  States  encourage  the  con- 
struction of  waterways  .f^ 

5.  Is  it  to  be  expected  that  the  present  and 


111G7S1 


vi  PREFACE 

recent  production  of  gold  will  cause  a  higher 
level  of  prices? 

6.  Any  other  topic  which  has  received  the 
approval  of  the  committee. 

A  first  prize  of  three  hundred  dollars,  and  a 
second  prize  of  two  hundred  dollars  were  of- 
fered for  the  best  studies  presented  by  class 
B,  composed  exclusively  of  those  who,  at  the 
time*  the  papers  were  sent  in,  were  under- 
graduates of  any  American  college. 

The  present  volume  was  awarded  the  first 
prize. 

Professor  J.  Laurence  Laughlin, 

University  of  Chicago,  Chairman. 
Professor  J.  B,  Clark, 

Columbia  University. 
Professor  Henry  C.  Adams, 

University  of  Michigan. 
Horace  White,  Esq., 
New  York  City. 
Professor  Edwin  F.  Gat, 
Harvard  University. 


NOTE 

When  this  essay  was  first  written  it  repre- 
sented undergraduate  work,  and  there  was 
no  thought  of  its  ultimate  pubheation.  Dur- 
ing the  year  that  has  followed,  additional 
sources  have  been  consulted,  —  mainly  of 
current  material,  but  the  material  available  on 
the  subject  is  so  voluminous  that  the  outline 
of  any  chapter  warrants  an  extended  treatise, 
while  the  entire  paper  is  little  -more  than  a 
hasty  review.  It  is  the  hope  of  the  writer, 
however,  that  its  very  brevity  will  commend 
this  little  book  to  many  persons  who,  lacking 
the  time  for  consulting  a  large  number  of  pub- 
lic reports  and  other  sources,  desire  a  general 
knowledge  of  the  problem  presented. 


CONTENTS 

CHAPTER  I 
Statistics  of  Industrial  Accidents 1 

CHAPTER  n  ^ 

The  Social  Cost  of  Industrial  Accidents  ...    18 

CHAPTER  in 

Voluntary  Agencies  compensating  Industrial 

Accidents 28 

CHAPTER  IV 

Employers'  Liability  in  the  United  States     .    .    51 

CHAPTER  V 
Employers'  Liability  Insurance 63 

CHAPTER  VI 
Conclusion  and  Suggested  Reforms 76 

Index 99 


STATISTICAL  TABLES 

I.   Fatal  Railway  Accidents  in  Cook  County  (Chi- 
cago)        3 

n.    Persons  maimed  in  Massachusetts  and  Causes 

of  Injury 4 

in.  Industrial  Accidents  in  Illinois 7 

IV.  Industrial  Accidents  in  Michigan 8 

V.  Industrial  Accidents  in  Ohio 8 

VI.  Industrial  Accidents  in  New  York      ....  9 

Vn.    Accidents  to  Coal-Mine  Employees  in  Illinois 

and  Pennsylvania 12 

Vlll.    Accidents  to  Railway  Employees  in  the  United 

States 14 

IX.    Coal-Mine  Accidents  in  Europe 16 

X.    Railway  Accidents  to  Employees  in  Great  Brit- 


am 


17 


XI.    Widows  and  Orphans  of  Coal-Miners  killed  at 

Work  in  Illinois  and  Pennsylvania       ...     23 

Xn.    Time  lost  by  Non-fatal  Coal-Mine  Accidents 

in  Illinois  and  Dependents  affected     ...    24 


xli  STATISTICAL  TABLES 

XIII.  Effect  of  Accident  on  the  FamUy  —  Twelve 

Typical  Cases       facing  p.  26 

XIV.  Industrial    Insurance    Rates    per    $1000    for 

Railway  Employees       32 

XV.    Relative  Costs  due  to  Losses  in  Different  States 

imposed  by  Employers'  Liability  Laws     .     .     58 

XVL    Liability  Experience  of  Insurance  Companies  .     70 

XVn.  Premiums  Received  and  Losses  Paid  in  the 
United  States  in  all  Lines  of  Insurance,  except 
Life  Insurance,  1904-1908  inclusive     ...     72 


INDUSTRIAL  ACCIDENTS  AND 
THEIR  COMPENSATION 


INDUSTRIAL  ACCIDENTS  AND 
THEIR  COMPENSATION 

CHAPTER  I 

STATISTICS   OF   INDUSTRIAL   ACCIDENTS 

'  "The  number  of  accidents  which  result  in  the  death  or  crippling 
of  wage  workers  ...  is  simply  appalling;  in  a  very  few  years  it  runs 
up  to  a  total  far  in  excess  of  the  aggregate  of  the  dead  and  wounded 
in  any  modern  war."  —  Theodore  Roosevelt  in  his  presidential  mes- 
sage of  December,  1908. 

Figures  suflBciently  complete  to  show  the 
number  of  accidents  to  workingmen  in  Amer- 
ican industry  are  not  obtainable.  No  com- 
pilation is  made  by  the  federal  bureau  of 
labor,  and  the  labor  bureaus  of  but  few  of  the 
states  attempt  to  gather  full  information. 
Even  in  these  states,  the  provisions  of  the  law 
are  inadequate  to  enforce  the  reporting  of 
accidents  by  employers,  and  facilities  for  the 
gathering  of  data  by  factory  inspectors  are 
usually  lacking.  Yet  there  are  many  sources 
from  which  more  or  less  fragmentary  informa- 
tion may  be  drawn,  and  it  is  evident  that  the 
statement  quoted  above  from  the  president's 
message  is  conservative. 

An  intensive  study  of  a  particular  district 
with  reference  to  industrial  accidents  has  been 


2  ACCIDENT  COMPENSATION 

made  in  connection  with  the  Pittsburg  "Sur- 
vey." ^  It  was  found  that  526  hves  were  sac- 
rificed to  production  in  Allegheny  County, 
Pennsylvania,  in  the  year  ending  June  30, 
1907.  The  loss  of  life  was  continual  and  relent- 
less, In  no  month  were  fewer  than  thirty-five 
killed.  In  no  single  week  were  there  fewer  than 
four,  and  on  but  sixty-four  days  of  the  year, 
aside  from  Sundays,  was  the  industry  of  the 
county  carried  on  without  loss  of  human  life. 
In  the  same  year  about  two  thousand  men 
suffered  injuries  serious  enough  to  necessitate 
extended  hospital  treatment.  Of  these,  294 
cases  were  investigated  in  detail.  In  127 
cases  the  victim  recovered  fully;  in  91  cases 
the  injury  was  slight  but  permanent;  and  in 
75  it  was  both  permanent  and  serious.  Says 
the  report :  — 

There  is  no  respite.  Each  year  turns  tjiem  out  as 
surely  as  the  mills  run  full  and  the  railroads  prosper. 
...  In  five  years  there  would  be  2585  (above  figures 
prorated).  Ten  years  would  make  it  5170,  — enough  to 
make  a  little  city  of  cripples.  ...  It  is  no  wonder  that 
for  a  stranger  Pittsburg's  streets  are  sad. 

Evidence  of  the  large  number  of  deaths 
resulting  from  industrial  accidents  may  be 
drawn  from  the  records  of  the  coroner's  oflBce 
of  Cook  County,  about  ninety  per  cent  of 

^  "One  Year's  Work  Accidents  and  their  Cost,"  by  Crystal  East- 
man, Charities  and  the  Commons,  yol.  xxi,  pp.  1143-1174, 


ACCIDENT  STATISTICS  3 

whose  population  reside  in  the  city  of  Chi- 
cago. Table  I  shows  the  number  of  employ- 
ees killed  by  the  railroads  in  the  county  dur- 
ing the  five-year  period  ending  November  30, 
1909.  This  includes  "grade-crossing"  acci- 
dents. It  is  noteworthy  that  forty-two  per 
cent  of  all  persons  killed  are  victims  of  the 
conditions  of  employment.   More  conclusive 

TABLE  I 

FATAL   RAILWAY   ACCIDENTS   IN   COOK   COUNTY    (CHICAGo) 


-     - 

Five  years 

1905 

1906 

1907 

1908 

1909 

ending  with 
1909    ■" 

Total  killed 

355 

371 

393 

270 

329 

1718 

Employees  killed 

105 

180 

190 

106 

141 

722 

Percentage  of  fatal 

accidents  befall- 

ing employees 

29.5 

4S.5 

48.3 

39.2 

42.8 

42 

facts  have  been  found  by  a  study  of  the  indi- 
vidual cases  coming  into  the  coroner's  office 
between  December  14,  1908,  and  February 
17,  1909.^  Out  of  729  coroner's  cases  during 
this  time,  212  were  inquests  upon  the  causes 
of  accidental  deaths,  and  in  an  examination 
of  the  records  of  these  212  cases  it  was  found 
that  at  least  71  were  due  to  accidents  occur- 
ring in  the  course  of  industrial  employment. 

^  From  Inquest  Register  No.  86.  This  does  not  include  fifty-six 
deaths  in  the  George  W.  Jackson  Crib  disaster  of  January  20,  1909. 
The  inquest  was  not  completed  until  late  in  February,  and  conse- 
quently the  cases  were  not  recorded  in  the  volume  studied. 


4  ACCIDENT  COMPENSATION 

Full  figures,  prorated  upon  this  basis,  indicate 
that  398  persons  each  year  are  martyrs  to 
production  in  the  city  of  Chicago. 

The  report  for  1905  of  the  decennial  census 
of  Massachusetts  furnishes  data  for  Table  II, 
showing  the  number  of  persons  maimed  and 
the  causes  of  injury.    It  should  be  observed 

TABLE  II 

PEHSONS   MAIMED   IN  MASSACHUSETTS   AND   CAUSES  OP  INJURY  ^ 


Causes  of  injury 

Number  maimed 

Percentage  of  all 
maimed 

Occupational  accident 
Non-occupational  accident 
Disease 

Military  service 
Not  specified 

1648 

1412 

528 

280 

156 

40.95 

35.09 

13.12 

6.96 

3.88 

Total  maimed 

4024 

100.00 

that  this  table  is  in  no  sense  complete  for 
industrial  accidents  in  Massachusetts.  Of 
injuries  that  are  fatal,  or  that  are  permanent 
but  do  not  result  in  the  loss  of  an  organ,  or 
that  are  only  temporary,  no  account  is  taken. 
But  these  limitations  on  the  completeness  of 
the  figures  only  add  to  the  significance  of  the 
fact  that  over  forty  per  cent  of  the  persons 
maimed  met  injury  in  the  course  of  employ- 
ment. To  be  sure,  no  distinction  is  made  be- 
tween industrial  and  non-industrial  employ- 

1  Massachusetts  Bulletin  oj  Labor,  vol.  xii,  p.  214. 


ACCIDENT  STATISTICS  5 

ments;  but  it  will  hardly  be  doubted  that  a 
very  large  proportion  of  the  occupational  acci- 
dents befell  workingmen. 

Further  conclusions  may  be  based  on  a 
study  of  the  mortality  tables  of  the  United 
States  Census.  Of  all  deaths  of  adult  males 
from  1900  to  1906  inclusive,  126,567,  or  9.1 
per  cent,  were  due  to  accidents.  "How  many 
of  these  accidents  were  the  result  of  occupa- 
tion it  is  not  possible  to  determine  with  abso- 
lute accuracy,  but  it  is  safe  to  assume  that 
about  one  half  of  the  deaths  from  accident 
among  males  is  the  result  of  industrial  em- 
ployments."^ 

The  collection  of  industrial  accident  statis- 
tics has  been  ordered  within  recent  years  by 
the  legislatures  of  many  of  the  leading  manu- 
facturing states.  Much  evidence  may  be  gath- 
ered from  these  sources,  but  the  short  time 
that  such  laws  have  been  in  operation,  to- 
gether with  the  usual  lack  of  provisions  for 
forcing  employers  to  make  returns,  renders  it 
doubtful  if  the  figures  reported  represent  the 
full  number  of  casualties. 

In  Minnesota,  employers  report  accidents 
to  the  State  Bureau  of  Labor.  The  statistics 
so  gathered  are  admitted  by  the  bureau  to  be 
quite  inadequate,  but  even  on  the  showing  of 

*  Bulletin  of  the  United  States  Bureau  of  Labor,  No.  78  p.  422. 


6  ACCIDENT  COMPENSATION 

reports  submitted,  it  appears  that  during  the 
year  ending  July  31,  1907,  3452  workmen 
were  injured.  Of  these,  220  died  from  their 
injuries.  During  the  succeeding  year,  ending 
July  31,  1908,  2661  workers  were  injured, 
147  of  them  fatally. 

Data  that  are  admitted  to  be  incomplete 
are  gathered  by  the  Iowa  Bureau  of  Statistics. 
They  show  that  during  the  three-year  period 
ending  with  1907,  5408  persons  were  reported 
to  the  bureau  as  injured  in  the  factories  and 
on  railways  in  the  state.  Of  these  injuries, 
192,  or  3.5  per  cent,  were  fatal.  These  figures, 
however,  being  limited  to  accidents  in  facto- 
ries and  on  railways,  doubtless  leave  out  of 
account  a  large  part  of  the  productive  enter- 
prises of  the  state. 

In  Wisconsin,  physicians  are  required  by 
law  to  report  to  the  Bureau  of  Vital  Statistics 
all  accident  cases  coming  under  their  care.^  In 
the  year  ending  September  30,  1907,  13,572 
accidents  were  reported,  and  of  these  7186, 
or  53  per  cent,  befell  employees  while  at  work. 
During  the  succeeding  year  10,392  cases  were 
reported,  in  5003  of  which,  or  48  per  cent,  the 
victim  was  an  employee  at  work.  Of  the  7186 
work  accidents  in  1906-07,  204,  or  2.8  per 

^  The  assertion  is  made  by  the  Wisconsin  Bureau  of  Labor  and 
Industrial  Statistics,  and  is  supported  by  very  good  evidence,  that 
the  reporting  of  accidents  is  not  at  all  general  among  the  physicians 
of  the  state. 


ACCIDENT  STATISTICS  7 

cent,  were  fatal,  and  1037,  or  14.4  per  cent, 
were  permanent.  In  1907-08,  135,  or  2.7  per 
cent,  of  the  5003  industrial  accidents  were 
fatal,  and  in  574,  or  11.5  per  cent,  of  the  cases, 
the  injury  was  permanent. 

In  1907  a  law  was  enacted  in  Illinois  re- 
quiring "every  person,  firm,  or  corporation" 
to  report  to  the  State  Bureau  of  Labor 
Statistics  all  accidents  entailing  the  loss  of 
thirty  or  more  days'  time  or  resulting  in 
death,  that  should  befall  employees  engaged  in 
the  performance  of  their  duties.  Penalties  are 
provided  for  failure  on  the  part  of  employers 
to  conform  to  the  requirements  of  the  law.  A 
summary  is  made  in  Table  III  of  the  returns 
for  the  first  two  and  one-half  years. 

*  TABLE  III 

INDUSTRIAL  ACCIDENTS   IN   ILLINOIS  ^ 


1907 
(July  1  to  Dec;  31) 

1908 

1909 

Two  and  one 
half  years 

Number  killed 
Number  injured 

298 
1094 

524 
2494 

899 
2214 

1721 

5802 

Total  accidents 

1392 

3018 

3113 

7523 

The  annual  reports  of  the  Michigan  Bureau 
of  Labor  furnish  data  for  the  statistics  of  acci- 
dents to  workingmen  in  that  state,  presented 
in  Table  IV. 

*  From  the  annual  reports  on  Industrial  Accidents  in  Illinois  of 
tlie  Illinois  Bureau  of  Labor  Statistics. 


ACCIDENT  COMPENSATION 

TABLE  IV 

INDUSTHIAL  ACCIDENTS   IN   MICHIGAN 


1904 

1905 

1906 

1907 

1908 

Five  years 

Fatal 

Serious  or  severe 

Slight 

42 
302 
130 

62 
236 
112 

49 
387 
175 

60 
421 
346 

46 
432 

282 

249 
1778 
1045 

Total  accidents 

474 

400 

611 

827 

760 

3072 

In  1904  a  law  was  passed  in  Ohio  making  it 
the  duty  of  all  "manufacturers"  to  report  to 
the  State  Bureau  of  Labor  accidents  befalling 
their  employees.  Table  V  shows  the  results 
for  three  years. 


TABLE  V 

INDUSTRIAL   ACCIDENTS   IN   OHIO 


1906 

1907 

1908 

Three  years 

Fatal 

Serious 

Minor 

103 

332 

1433 

252 

485 

1290 

105 
397 
752 

460 
1214 
3475 

Total  accidents 

1868 

2027 

1254 

5149 

In  1907  the  Bureau  of  Industrial  Statistics 
of  the  Pennsylvania  Department  of  Internal 
Affairs  began  gathering  data  relating  to  indus- 
trial accidents.  The  report  for  1907  gives  6140 
accidents  to  men  engaged  in  industrial  em- 
ployments in  the  state.  Of  these,  1422  were 
fatal. 


ACCIDENT  STATISTICS  9 

An  effort  to  gather  such  data  has  also  been 
made  for  a  number  of  years  by  the  Bureau 
of  Statistics  of  New  Jersey,  but  no  results 
for  years  earlier  than  1905  are  presented  in 
definite  form.  For  the  three  years  from 
October  1,  1905,  to  September  30,  1908,  4266 
accidents  were  reported,  of  which  928  were 
fatal. 

Figures  for  accidents  in  factories,  quarries, 
and  tunnel  construction  have  long  been  gath- 
ered by  the  New  York  State  Department  of 
Labor.  Its  quarterly  bulletins  furnish  the 
data  for  Table  VI. 

TABLE  VI 

INDUSTRIAL  ACCIDENTS   IN   NEW   YORK 


Year  (ending  June  30) 

1907 

1908 

1909 

Three  years 

Fatal 

Permanent 

Serious  and  probably 

permanent 
Temporary 

309 
2,634 

1,478 
13,651 

294 
2,124 

1,876 
11,983 

258 
1.543 

1,880 
11,756 

861 
6,301 

5,234 
37,390 

Total  accidents 

18,072 

16,277 

15,437 

49,786 

The  probable  incompleteness  of  the  returns 
to  the  state  labor  offices,  as  well  as  the  varying 
regulations  for  the  reporting  of  accidents, 
make  it  impossible  to  draw  definite  conclu- 
sions from  these  statements.  However,  they 
show  clearly  that  in  the  year  1907,  for  exam- 
ple, a  total  of  at  least  43,713  industrial  acci- 


10  ACCIDENT  COMPENSATION 

dents  befell  workingmen  in  Minnesota,  Iowa, 
Wisconsin,  Illinois,  Michigan,  Ohio,  Pennsyl- 
vania, New  Jersey,  and  New  York,  and  that 
3436  of  these  were  fatal. 

For  two  of  the  greatest  and  most  hazard- 
ous of  American  industries,  coal-mining  and 
railway  transportation,  accident  figures  have 
been  gathered  that  are  approximately  com- 
plete, and  fragmentary  evidence  is  available 
regarding  accident  risks  in  iron  and  steel  man- 
ufacture. 

An  astounding  total  of  casualties  is  charge- 
able to  the  production  of  coal.  The  United 
States  Geological  Survey  has  collected  figures 
of  coal-mining  accidents  in  1907  and  1908 
from  twenty -two  states,  which  produce  98  per 
cent  of  American  coal.  In  1907  this  report 
shows  3125  men  killed  and  5316  injured;  in 
1908,  2450  killed  and  6772  injured.  In  1907 
one  man  was  killed  for  each  206  employed ;  in 
1908,  one  for  each  278  employed.  In  1907, 
one  man  was  killed  for  each  145,471  tons  of 
coal  mined;  in  1908,  one  man  was  killed  for 
each  167,545  tons  mined.  The  Geological 
Survey  has  also  found  that  19,469  men  were 
killed  in  the  coal-mines  of  the  same  states 
during  the  decade  ending  with  1908. 

For  the  purpose  of  a  close  study  of  accident 
statistics  in  coal-mines,  the  figures  shown  in 


ACCIDENT  STATISTICS  11 

Table  VII  have  been  taken  from  the  mining 
reports  of  Pennsylvania  and  Illinois,  —  two 
states  which  produce  sixty  per  cent  of  the 
total  output  of  American  coal.  The  compila- 
tion covers  the  decade  ending  with  1908,  and 
shows  that  the  average  mine  employee  of 
these  states  has  one  chance  in  324  of  death 
from  his  year's  work,  and  one  chance  in  138 
of  injury.  If  he  looks  forward  to  ten  years' 
employment  in  the  mines,  he  has  one  chance 
in  32  of  fatal  injury,  and  one  chance  in  14  that 
a  non-fatal  accident  will  befall  him.  The  pro- 
duction of  178,266  tons  of  coal  entails  the  loss 
of  a  life,  while  the  production  of  78,195  tons 
calls  forth  an  injury.  It  is  a  striking  fact  that 
over  thirty  per  cent  of  coal-mine  casualties 
are  fatal,  —  a  circumstance  doubtless  due  in 
large  measure  to  the  great  disasters  which 
command  public  attention  so  frequently. 

The  manufacture  of  iron  and  steel  is 
fraught  with  many  perils.  The  Cambria  Mu- 
tual Benefit  Company  of  Johnstown,  Penn- 
sylvania, a  concern  writing  industrial  insur- 
ance almost  exclusively  among  metal  workers, 
has  found  that  46  per  cent  of  the  deaths 
among  its  members  in  1906  were  due  to  acci- 
dents.^ The  Prudential  Insurance  Company 
of  America  reports  that  for  the  decade  ending 
with  1906, 11.2  per  cent  of  the  deaths  among 

*  Bulletin  of  the  United  States  Bureau  of  Labor,  No.  78,  p.  425. 


12 


ACCIDENT  COMPENSATION 


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ACCIDENT  STATISTICS  IS 

its  policy-holders  employed  in  the  iron  and 
steel  industry  were  due  to  accidents  alone.  ^ 
The  reports  on  fatal  accidents  in  the  South 
Chicago  plant  of  the  United  States  Steel  Cor- 
poration have  been  studied  in  the  coroner's 
oflSce  in  Chicago.  It  was  found  that  46  lives 
were  lost  in  the  plant  in  1906.  No  single  great 
disaster  swelled  the  total.  Four  men  were 
killed  at  one  time;  four  more  lost  their  lives  in 
two  other  accidents.  The  remaining  thirty- 
eight  were  picked  off  one  by  one.  There  were, 
consequently,  forty-one  separate  accidents  in 
which  human  life  was  lost.^ 

In  1901  a  law  was  passed  by  Congress  di- 
recting the  Interstate  Commerce  Commis- 
sion to  collect  full  statistics  of  accidents  on 
American  railways,  and,  while  the  law  has 
been  in  effect  a  comparatively  short  time,  the 
efficiency  of  the  methods  used  by  the  Federal 
government  in  gathering  information  and  the 
relative  ease  with  which  facts  concerning  rail- 
ways may  be  obtained,  give  rise  to  the  belief 
that  these  figures  are  reasonably  complete. 
Table  VIII,  compiled  from  the  monthly  acci- 
dent bulletins  of  the  commission,  shows  the 
number  of  employees  killed  or  injured,  to- 
gether with  the  ratios  of  these  to  the  total 

*  Bulletin  of  the  United  States  Bureau  of  Labor,  No.  78,  p.  426. 

*  William  Hard  in  Everybody's  Magazine,  vol.  xvii,  p.  579.  "Steel," 
says  Mr.  Hard,  "is  war." 


14 


ACCIDENT  COMPENSATION 


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ACCIDENT  STATISTICS  15 

number  employed.  Similar  data  are  also 
given  for  trainmen  separately.  The  totals  are 
large,  and  the  ratios  are  appalling.  During  the 
seven  years  ending  with  1908,  23,895  employ- 
ees were  killed  and  335,964  were  injured  on 
the  railways  of  the  country.  A  study  of  the 
ratios  indicates  that  the  average  employee 
may  count  on  one  chance  in  414  of  violent 
death  within  a  year.  If  he  prefers  to  consider 
the  prospect  of  injury,  there  is  one  chance  in 
twenty-nine  that  an  accident  entailing  at 
least  four  days'  disability  will  befall  him.  If 
he  looks  forward  to  seven  years  of  railway 
employment,  he  faces  one  chance  in  fifty-nine 
of  death  by  accident,  and  one  in  four  of  injury. 
The  outlook  for  a  trainman  is  still  worse.  Of 
his  fellow  workers,  14,888  were  killed  and 
218,082  were  injured  during  the  seven-year 
period.  In  a  given  year  he  has  one  chance  in 
127  of  death,  and  one  in  nine  of  injury.  Seven 
years  in  the  train  service  offer  him  one  chance 
in  eighteen  of  death,  and,  if  his  place  is  one  of 
average  danger,  present  a  practical  certainty 
of  injury. 

Without  attempting  a  full  examination  of 
the  statistics  of  industrial  accidents  in  foreign 
countries,  a  few  comparisons  may  be  drawn 
which  disclose  the  extraordinary  hazards  of 
industrial  employment  in  the  United  States. 


16 


ACCIDENT  COMPENSATION 


Table  IX  furnishes  data  for  a  comparison 
of  statistics  of  coal-mine  accidents  in  the  year 
1903.  In  Europe  an  employee's  chance  of 
fatal  injury  is  in  no  instance  greater  than  one 
in  520,  and  the  average  for  the  five  countries 
considered  is  one  in  724.  In  Illinois  and  Penn- 
sylvania the  chance  is  one  in  323.  American 
methods  of  coal  production  and  the  richness  of 

TABLE  IX 

COAL-MINE  ACCIDENTS   IN   EUROPE    (1903)* 


Austria 

Belgium 
(1902) 

Great 
Britain 

France 

Prussia 

Totals 

Men  employed 

64,061 

134,889 

842,066 

167,213 

429,837 

1,688,0S« 

Men  killed 

49 

144 

1,072 

170 

826 

3,261 

Men  employed 

for  each  one 

killed 

1,307 

937 

786 

934 

620 

724 

Tons  of  coal 

mined 

11,498,111 

22,877,470 

230,334,469 

34,906,418 

108,809,384 

408,425,853 

Tons  mined  for 

each  man 

killed 

234,655 

158,871 

214,864 

206,332 

131,731 

180,689 

our  mines  are  such  that  while  the  risk  of  indi- 
vidual injury  is  twice  as  great  in  this  country 
as  it  is  abroad,  the  number  of  tons  mined  for 
each  man  killed  is  practically  the  same  in  both 
instances. 

In  Table  X  are  shown  statistics  of  railway 
accidents  in  Great  Britain  for  1904  and  1905. 
In  the  United  Kingdom  one  man  is  killed 
yearly  on  the  railways  for  each  1427  em- 
ployed ;  in  the  United  States  it  is  one  for  each 
414.   In  Great  Britain  one  man  is  injured  for 

*  Compiled  from  the  special  report  (1905)  of  the  United  States 
Commissioner  of  Labor  on  Cod  Mine  Labor  in  Europe. 


ACCIDENT  STATISTICS 


17 


each  150  employed;  in  the  United  States,  one 
for  each  29.  In  England,  on  the  other  hand, 
9.5  per  cent  of  all  accidents  to  railway  em- 
ployees are  fatal,  as  compared  with  6.7  per 
cent  in  America. 

TABLE  X 

RAILWAY    ACCIDENTS    TO    EMPLOYEES   IN   GREAT    BRITAIN  ^ 


Year 

Men 
employed 

Men 
killed 

.Men  employed 

for  each  one 

killed 

Jlen 
injured 

Men  employed 

for  each  one 

injured 

Percentage 

of  casualties 

fatal 

1904 
1905 

581,664 
581,6642 

416 
399 

1,398 
1,458 

3,921 
3,800 

148 
153 

9.5 
9.5 

The  statistical  information  brought  for- 
ward in  this  chapter  has  made  it  clear  that  an 
enormous  human  tax  is  imposed  by  American 
production.  The  findings  of  the  Pittsburg 
*'  Survey,"  the  study  of  coroners'  records,  the 
reports  of  the  United  States  Census,  the  fig- 
ures gathered  by  state  labor  offices,  and  the 
complete  data  concerning  coal-mining  and 
railway  accidents,  together  with  the  com- 
parative statistics  from  the  experience  of  for- 
eign countries,  all  point  to  the  importance  of 
the  industrial  accident  problem  in  the  United 
States. 

*  Compiled  from  the  reports  of  the  Railway  Commissioners  of  the 
Board  of  Trade  in  the  British  Parliamentary  Papers. 

*  Figures  for  1904  are  used.   Those  for  1905  are  not  available. 


CHAPTER  II 

THE  SOCIAL  COST  OF  INDUSTRIAL  ACCIDENTS 

It  is  difficult  to  measure  with  any  accuracy 
the  extent  to  which  social  standards  are  low- 
ered by  the  loss  of  earning  power  caused  by 
industrial  accidents,  but  the  great  cost  to 
the  community  must  be  evident  even  to  the 
superficial  observer.  Any  number  of  very  sig- 
nificant illustrations  may  be  drawn  from  the 
observations  of  social  workers,  and  there  is 
every  evidence  that  much  evil  of  the  most 
acute  character  is  traceable  to  the  disorgan- 
ization of  homes  when  industrial  accidents 
befall  the  bread-winners.  Bright  hopes  may 
be  blasted,  and  happy  families  dragged  to  the 
lowest  depths  of  shame  and  misery,  while 
bench  and  bar  quibble  for  years  over  puerile 
questions  of  legal  responsibility.^ 

An  impression  may  exist  that  the  men 
killed  and  injured  in  industry  are  usually  the 
aged,  who,  because  of  infirmities,  are  an  easy 
prey  to  the  many  pitfalls  of  danger  about 
railroads,  mines,  and  manufacturing  plants. 

'  The  general  features  of  this  particular  home-wrecking  evil  are 
shillfully  made  use  of  in  The  Turn  of  the  Balance,  a  work  of  fiction 
by  Brand  Whitlock. 


SOCIAL  COST  OF  ACCIDENTS  19 

But  facts  disprove  this  notion;  for  one  respect 
in  which  industrial  accidents  are  very  expen- 
sive to  society  is  in  the  youthfulness  of  the 
victims. 

In  the  study  of  industrial  accidents  in  con- 
nection with  the  Pittsburg  "  Survey,"  ^  it  was 
found  that  of  526  men  killed  in  the  industries 
of  Allegheny  County  in  the  year  ending  June 

30,  1907,  442,  or  84  per  cent,  were  under  forty 
years  of  age,  and  that  205,  or  39  per  cent  of 
all  killed,  were  under  thirty. 

Of  the  deaths  due  to  industry  in  Illinois, 
reported  to  the  Illinois  Bureau  of  Labor  Sta- 
tistics for  the  six  months  ending  December 

31,  1907,  the  average  age  of  the  victims  was 
thirty-three  years.  During  this  period  298 
fatal  accidents  were  reported.  In  135  cases, 
or  45  per  cent,  the  victim  was  under  thirty; 
in  77  cases,  or  26  per  cent,  between  thirty  and 
forty;  in  53  cases,  or  18  per  cent,  between 
forty  and  fifty;  and  in  only  33  cases,  or  11  per 
cent,  fifty  or  over.  During  the  same  six-month 
period,  1094  men  were  injured  severely 
enough  to  entail  at  least  thirty  days'  disabil- 
ity. Of  these,  501,  or  46  per  cent,  were  under 
thirty;  281,  or  26  per  cent,  were  between 
thirty  and  forty;  214,  or  19  per  cent,  were 
between  forty  and  fifty;  and  but  98,  or  9  per 
cent,  were  fifty  or  over. 

*  See  page  1. 


20  ACCIDENT  COMPENSATION 

For  the  three  years  ending  July  31,  1908, 
246  fatal  injuries  in  Minnesota  were  reported 
to  the  State  Bureau  of  Labor.  ^  In  140  cases, 
or  57  per  cent,  the  man  killed  was  under 
thirty  years  of  age;  in  55  cases,  or  23  per  cent, 
between  thirty  and  forty;  in  32  cases,  or  13 
per  cent,  between  forty  and  fifty;  and  in  only 
19  cases,  or  8  per  cent,  fifty  or  over.  Injuries 
to  2365  persons  were  reported  during  the 
same  period,  of  which  1392,  or  59  per  cent, 
were  under  thirty;  462,  or  20  per  cent,  were 
between  thirty  and  forty;  359,  or  15  per  cent, 
between  forty  and  fifty;  and  but  152,  or  6  per 
cent,  were  fifty  or  older. 

Of  7186  industrial  accident  victims  re- 
ported to  the  Wisconsin  Bureau  of  Vital  Sta- 
tistics for  the  year  ending  September  30, 
1907,  2811,  or  39  per  cent,  were  under  twenty- 
five  years  of  age;  3097,  or  43  per  cent,  were 
between  twenty -five  and  forty-five ;  and  but 
1085,  or  15  per  cent,  were  over  forty -five.  In 
193  cases  the  age  of  the  victim  was  not  stated. 
In  the  succeeding  year,  5003  industrial  acci- 
dents were  reported:  1799  of  these,  or  36  per 
cent,  befell  men  under  twenty -five;  2271,  or 
45  per  cent,  men  between  twenty-five  and 
forty -five;  and  only  781,  or  15  per  cent,  men 

*  See  page  5.  This  does  not  include  those  injured  on  railways. 
Railway  companies  report  to  the  State  Railroad  and  Warehouse 
Commission. 


SOCIAL  COST  OF  ACCIDENTS  21 

as  old  as  forty-five.  In  152  cases  the  age  was 
not  stated.  Of  the  135  men  suffering  fatal 
injury  in  1907-08,  42,  or  31  per  cent,  were 
under  twenty-five  ;  51,  or  38  per  cent,  were 
between  twenty-five  and  forty-five ;  and  42, 
or  31  per  cent,  were  forty -five  or  older. 

From  experience  in  Minnesota,  Illinois,  Wis- 
consin, and  in  Pittsburg,  it  therefore  seems 
clearly  established  that  the  victims  of  indus- 
trial accidents  are  not  old  men  whose  infirm- 
ities have  rendered  them  particularly  liable 
to  injury.  About  45  per  cent  of  the  casualties 
considered  befell  men  under  thirty  years  of 
age  ;  about  80  per  cent,  men  under  forty  ;  and 
about  90  per  cent,  men  who  had  not  reached 
fifty,  —  the  lowest  age  at  which  society,  from 
a  purely  economic  interest,  can  afford  to  lose 
the  services  of  its  workingmen. 

Industry,  in  a  word,  is  doubly  wasteful  of 
life  and  efficiency.  It  may  be  charged  not 
only  with  the  extravagance  of  killing  and 
maiming  yearly  thousands  of  workers,  but 
it  seems  to  choose  for  its  victims  many  per- 
sons in  the  prime  of  manhood,  normally  with 
years  of  life  before  them,  and  with  obliga- 
tions but  partially  discharged  to  wives  and 
children. 

And  what  of  these  wives  and  children?  Are 
the  victims  of  industrial  accidents  those  who 


22  ACCIDENT  COMPENSATION 

have  been  led  by  the  lack  of  social  ties  to 
commit  the  reckless  blunder  of  being  killed  or 
maimed?  Table  XI  shows  that  the  11,328 
coal-miners  killed  at  work  in  Illinois  and  Penn- 
sylvania during  the  ten  j^ears  ending  with 
1908,  left  6183  widows  and  14,444  children. 
Of  the  miners  killed,  55  per  cent  were  married, 
and  there  was  an  average  of  seven  orphans  to 
each  three  families.  When  the  full  statistics 
of  coal-miners  killed  at  work  during  that  dec- 
ade in  the  entire  United  States,  19,649,  are 
estimated  upon  this  basis,  the  indication  is 
that  the  dependency  of  over  ten  thousand 
widows  and  over  twenty-five  thousand  or- 
phans may  be  charged  to  the  account  of 
American  coal  production  in  ten  years. 

The  annual  Mine  Report  of  the  Illinois 
Bureau  of  Labor  Statistics  furnishes  data  for 
Table  XII,  showing  in  the  case  of  men  non- 
fatally  injured  in  the  coal-mines  of  the  state, 
the  outcome  of  the  injury  and  the  number  of 
dependents  affected  by  it.  Of  5423  men  so  in- 
jured during  the  decade,  13  per  cent  were  per- 
manently disabled,  and  those  recovering  lost 
an  average  of  fifty-three  days'  time.  Of  these 
5423  men,  55  per  cent  were  married,  and 
there  was  an  average  of  over  two  children  to 
each  family. 

In  connection  with  the  Pittsburg  *'  Survey" 
it  was  found  that  258  out  of  526  men  killed  in 


SOCIAL  COST  OF  ACCIDENTS 


23 


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24 


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SOCIAL  COST  OF  ACCIDENTS  25 

the  industries  of  the  county  in  one  year,  left 
dependent  widows  and  families.  The  fortunes 
of  132  of  these  fatherless  famihes,  including 
470  children  under  sixteen,  were  followed  for 
a  year  or  more  after  the  accident.  In  some 
cases  considerable  insurance  was  left,  in  others 
the  widow  remarried,  and  in  still  others  there 
were  grown  sons  to  assume  the  burdens  of  the 
lost  father.  These  were  the  few;  the  majority 
were  left  in  straitened  circumstances.  Out  of 
the  132  widows,  55  went  to  work,  13  returned, 
with  children,  to  the  homes  of  their  parents, 
while  35  received  aid  from  outside  sources.  In 
other  cases  children  were  taken  from  school 
and  put  to  work. 

>  Is  it  not  reasonable  to  raise  the  question 
whether  a  great  deal  of  the  undesirable  em- 
ployment of  children  under  legal  age  is  not 
due  to  the  economic  necessity  imposed  by 
industrial  accident  losses  .^^  In  his  report  for 
1906,  the  Chief  Mining  Inspector  of  Pennsyl- 
vania says:  — 

During  the  years  1900  to  1906  inclusive,  mining 
casualties  (in  Pennsylvania)  left  1611  widows,  and 
3410  orphans  under  fourteen  years.  .  .  .  When  a  state 
enacts  a  law  prohibiting  the  employment  of  children 
until  they  reach  the  ages  of  fourteen  or  sixteen  years, 
it  should  in  justice  provide  some  way  whereby  the 
children  can  be  taken  care  of  until  they  are  legally  per- 
mitted to  be  employed.  ...  I  have  lived  a  lifetime 
among  the  mine-workers,  and  I  know  whereof  I  speak 


26  ACCIDENT  COMPENSATION 

when  I  say  that  humanity  demands  that  some  provi- 
sion be  made  for  these  widows  and  orphans. 

The  experience  of  relief  agencies,  both  pub- 
lic and  private,  might  be  drawn  upon  indefi- 
nitely for  evidences  of  the  social  cost  of  indus- 
trial accidents  in  lowered  standards,  wrecked 
homes,  and  destitution. 

Table  XIII  has  been  'arranged  from  the 
Report  for  1908  of  the  Chicago  Relief  and 
Aid  Society  (now  the  United  Charities  of  Chi- 
cago). The  conditions  are  typical.  The  aver- 
age age  of  the  man  injured  at  his  work  is 
thirty-seven;  the  average  contribution  from 
labor  union  or  employer  is  insuflScient  even 
for  medical  treatment  and  attendance;  and 
the  average  weekly  income  of  the  families  con- 
sidered is  reduced  by  two  thirds. 

Says  the  President  of  the  Board  of  Commis- 
sioners of  Cook  County  (Chicago)  in  his  annual 
report  for  1907:  — 

Injuries  received  in  industrial  pursuits  are  adding 
each  year  scores  of  persons  and  families  to  the  relief 
list  of  the  County  Agent's  office.  Hundreds  of  able- 
bodied  men  in  the  prime  of  life,  are  annually  receiving 
injuries  which  result  in  the  loss  of  life,  limbs,  or  health, 
and  make  many  of  them,  or  their  families,  county 
charges.  Most  of  these  men  have  large  families,  and 
when  the  breadwinner  is  killed  or  incapacitated  he 
usually  leaves  them  without  means  of  support.^ 

^  First  annual  message  of  William  Busse,  1907,  President  of  the 
Board  of  Commissioners  of  Cook  County,  p.  13. 


TABI 

EFFECT   OF   ACCIDENT   ON    TH 

(Rearranged  from  the  Report  for  1908 


BEFORE  ACCIDENT 

THE  INJURY 

COMPENSATION 

Occupation 

Age 

Wages 

Nature  and  cause 
of  injury 

Union 
benefit 

Damages  recovered 

s 

I 

Trucker 

wholesale 

store 

35 

$10.00 

iCilled  by  fall  down 
elevator  shaft 

None 

Casualty  Co.  claimed  no 
liability.  Employer  gave 
»100.    Suit  pending 

II 

Painter 

27 
42 

12.00 

Skull  fractured  by 
fall  from  ladder. 
Injury  temporary 

None 

None 

111 

Hodcarrier 

13.00 

Broken  hip  from 
fall  in  street 

None 

None 

IV 

Teamster 

41 

12.00 
10.00 

Killed  by  bad  pav- 
ing.  Thrown  from 
wagon 

None 

$700  from  City.   Law- 
yer's fees,  etc.,  *250 

V 

Laborer 

36 

Killed.  Crushed  in 
elevator  shaft 

None 

$100.  Lawyer's  fees, 
etc.,  $30 

VI 

Laborer 

36 

12.00 

General  injuries. 
Fell  .16  feet  into  foun- 
dation pit 

$15  col- 
lection 

None 

Suit  started  for  $6000 

VII 

Laborer 

36 

10.00 

Insanity  caused  by 
brick  falling  on  head 

$500  secured  by  Legal 
Aid  Society 

VIII 

Shoemaker 

46 

10.00 

Killed  in  R.  R.  acci- 
dent 

None 
None 

Funeral  expenses  paid 
by  R.  R.  Co. 

IX 

Struetural 
ironworker 

33 

25.00 

Foot  permanently 
disabled  by  falling 
piece  of  iron 

One  leg  three  inches 
shorter  than  other, 
cave  in  of  excavation 

None.   Employing  firm 
broken  up 

T 

X 

Teamster 

42 

12.00 

None 
None 

Employers  gave  $200  and 
promised  life  job 

XI 

Laborer 

47 

9.00 
12.00 

Back  weak.    Fell 
from  scaffold 

None 

XII 

Laborer 

32 

Killed  in  grain  ele- 
vator 

None 

suit  still  undecided. 
Employers'  otfer  of  $200 
refused 

Averages 

37.75 

$12.25 

N.  B.  No.  VI I  is  not 
an  industrial  acci- 
dent 

About  $140 

T 
f 

[Ill 

MILY — 12   TYPICAL   CASES 

he  Chicago  Relief  and  Aid  Society.) 


AFTER  ACCIDENT 

REMAKKS 

e 

Present  support  of 
family 

Average  weekly  income 

No.  In 
fam- 
ily 

Man 

Wife 

Child'n 

h 

Woman  seeking  work 
cleaning  offices.    Sub- 
rents  rooms.   Uirl  age 
16  sickly 

7 
2 

Family  not  adjusted  to  new 
condition.     Children  in  in- 
stitution 

) 
hs 

No  income.  Borrowed 
♦60  from  relatives 

Young  Germans  with  good 
standard  of  llvnig.  Checked  in 
homemaking  before  adjusted 
to  new  life 

e 

18 

Woman  works  in  Can 
Factory 

S5.00 

6 

Man  will  recover.   Meantime 
wife  must  neglect  care  of  sick 
husband  and  children  and  be- 
come factory  worker 

iar 

Woman  works  as 
laundress;  affected 
with  rheumatism 

8.00 
6.00 

5 

Family  self-supporting  up  to 
time  of  accident 

ar 

Roy  15;  barber's  ap- 
prentice 

$4.50 

5 

Settlement  with  employer 
took  four  years 

ar 

Woman  works  in 
bakery 

5 

Not  infrequently  men  are 
deterred  from  going  back  to 
work  through  fear  of  injuring 
their  claim 

;ar 

Conservator  to  pay 
$45  a  month  while 
money  lasts 



3 

Moral  deterioration  is  apt  to 
occur  while  waiting  on  our 
slow-moving  justice.    Woman 
made  no  effort  while  suit  was 
pending 

;ar 

Oldest  child  sickly ; 
woman  washes 

3.00 

6 

At  time  of  accident  woman 
ericernte.    Recovery  from 
shock  doubtful 

jars 

Savings  exhausted : 
man  canvasses  picture 
frames  and  books 

$2.50 
8.00 

4 

Man  permanently  removed 
from  productive  employment 

e 

s 

Watchman 

I   9 

Must  take  position  usually 
held  by  old  man 

ars 

Man  works  when 
able ;  woman  washes 

4.50 

2.00 

5 

Even  when  income  does  not 
suffer  serious  cut  the  mother 
is  taken  from  care  of  children 

t 

s 

Woman  frail.  Scrubs 
and  washes.    Two 
children  working 

1.50 

5.00 

5 

JIan  insured  for  $1000  in  in- 
solvent lodge.   Old  members 
raised  $150  benefit 

iars 

OS. 

Seven  women  and 
three  children  must 
work 

4.16 

5 

SOCIAL  COST  OF  ACCIDENTS  £7 

During  the  year  1908,  an  attempt  was  made 
at  'iie  county  agent's  office  in  Chicago  to  as- 
certain the  exact  number  of  rehef  cases  caused 
by  industrial  accidents.  As  many  as  234  cases 
of  such  dependency  were  found,  but  the  rush 
of  demands  following  the  industrial  depression 
of  1907  confused  the  investigation,  and  this 
figure  is  inaccurate.  During  the  year  ending 
November  30,  1909,  there  were  338  cases  in 
which  relief  was  made  necessary  by  the  disa- 
bility or  the  death  of  "husband  or  bread- 
winner, from  injury  received  by  accident.'* 
These  were  not  all,  however,  "industrial  acci- 
dents," in  the  sense  in  which  the  term  is  here 
used. 

The  facts  of  this  chapter  are  necessarily  in- 
conclusive, for  only  limited  information  is 
available  that  bears  directly  upon  the  social 
cost  of  injuries  to  workmen.  Yet  it  is  evident 
that  the  victims  are  usually  young  men,  that 
the  majority  of  them  have  families,  and  that 
the  standard  of  living  of  these  families  is 
greatly  lowered  by  losses  due  to  the  injuries. 
The  story  of  industrial  accidents  is  at  best  a 
tale  of  destitution,  bhghted  hopes,  and  ar- 
rested development. 


CHAPTER  III 

VOLUNTARY  AGENCIES  COMPENSATING  INDUS- 
TRIAL ACCIDENTS^ 

The  foregoing  chapters  have  set  forth  the 
enormous  blood-tax  that  is  laid  upon  the  work- 
ers of  American  industry,  —  the  killing  and 
maiming  of  men  in  the  prime  of  life,  with 
wives  and  children  dependent  upon  them,  — 
and  the  consequent  discouragement  of  whole- 
some living.  But  our  industrial  society  does 
not  throw  the  victim  of  such  an  accident 
unnoticed  upon  the  scrap-heap.  There  are 
numerous  mutual  organizations  among  work- 
ingmen,  together  with  more  comprehensive 
schemes  conducted  by  employers  and  by  pri- 
vate insurance  companies,  which  suggest  that 
the  cost  of  industrial  accidents  may  be  met 
in  an  adequate  way.  Moreover,  the  common 
law  of  employer's  liability,  with  many  statu- 
tory changes,  is  in  effect  in  every  state. ^  In 
the  succeeding  chapters  the  operation  and 
effectiveness  of  these  agencies  will  be  con- 
sidered. 

'  The  facts  in  this  chapter  have  been  drawn  in  large  measure 
from  Industrial  Insurance  in  the  United  States,  by  Charles  R.  Hen- 
derson. 

*  See  chapter  iv. 


COMPENSATION  BY  PRIVATE  AGENCIES  29 

Relief  organizations  have  sprung  from  the 
efforts  of  employees  themselves  to  express 
neighborly  and  fraternal  feelings  towards 
those  in  trouble.  These  naturally  embrace  all 
misfortunes,  whether  arising  from  industrial 
injury  or  not;  the  insurance  against  work  acci- 
dents is  but  a  part  of  their  general  purpose. 
The  most  primitive  way  of  relieving  distress 
is  to  "pass  the  hat"  for  the  benefit  of  an 
unfortunate  fellow  employee.  But  the  term 
"fellow  employee"  is  difficult  to  define  in  a 
complex  industrial  organization,  and  this 
loose  practice  leaves  abundant  opportunity 
for  shirking.  Consequently  many  groups  of 
employees  have  organized  into  local  aid 
societies. 

An  analysis  is  given  herewith  of  the  impor- 
tant features  of  twenty-one  of  these  organiza- 
tions concerning  which  information  has  been 
collected  and  analyzed.^ 

Expenses  are  usually  met  by  the  employees 
themselves,  but  the  employer  sometimes  con- 
tributes money  and  often  aids  in  administra- 
tion. Eighteen  of  these  societies  grant  death 
benefits  averaging  $125;  two,  the  receipts 
of  a  special  assessment,  and  one,  nothing. 
Eighteen  of  them  grant  weekly  disability  ben- 
efits averaging  $5.65;  one  gives  free  medical 

*  The  societies  are  described  in  chapters  ii  and  vii  of  Industrial 
Insurance  in  the  United  States,  by  Charles  R.  Henderson. 


30  ACCIDENT  COMPENSATION 

care  in  addition,  and  one  provides  half  wages. 
The  duration  of  disabihty  payments  is  not  un- 
limited. Fifteen  societies  restrict  it  to  periods 
averaging  fourteen  weeks,  while  one  limits  the 
total  payment  to  $96,  and  in  another  the  range 
is  from  $96  to  $176,  according  to  the  class  of 
the  member.  Many  of  them  provide  that 
drunkenness  or  immoral  conduct  shall  forfeit 
participation  in  benefits,  and  either  old  age  or 
bad  physical  condition  often  bars  an  employee 
from  admission  to  membership. 

Persons  of  the  same  race  in  a  particular 
locality,  or  groups  of  individuals  who  for  any 
other  reason  are  bound  by  common  interests, 
naturally  aid  one  another  in  emergencies. 
This  custom  also  has  revealed  the  fact  that  a 
clear  definition  of  the  obligations  and  bene- 
fits of  membership  is  important,  and  the  local, 
and  sometimes  racial,  fraternal  society  is  the 
result. 

f  In  both  of  these  relief  agencies  the  methods 
are  crude,  the  rates  and  the  payments  are  un- 
scientifically graded,  and  the  benefits  are  suf- 
ficient only  for  temporary  needs.  The  pecu- 
niary assistance  of  the  societies  is  in  no  sense 
comprehensive  enough  to  make  up  for  the 
loss  of  earning  power. )  In  addition  to  this, 
they  are  so  localized  in  membership  that  a 
single  epidemic  or  catastrophe  might  crush 
them;    members    changing    employment    or 


COMPENSATION  BY  PRIVATE  AGENCIES  31 

moving  away  lose  protection  at  a  time  when 
it  is  most  likely  to  be  needed;  the  burden  of 
accident  losses  is  thrown  upon  the  workers; 
and,  last  of  all,  the  benefit  payments  savor  too 
much  of  charity  to  conserve  the  independence 
and  self-respect  of  the  beneficiaries. 

The  national  fraternal  organizations  are 
comparable  to  these  societies  in  many  respects, 
but  their  main  business  feature  is  life  insur- 
ance. Accident  benefits  are  only  incidental,  as 
when  contributions  or  benefits  are  turned  to 
the  aid  of  a  particularly  unfortunate  member. 

Trades  unions  do  some  important  work  in 
industrial  accident  insurance.  Such  insurance 
with  generous  benefits  has  been  successfully 
provided  for  members  by  seven  railway  bro- 
therhoods.^ These  are  the  Grand  Brother- 
hood of  Locomotive  Engineers,  the  Order  of 
Railway  Conductors,  the  Brotherhood  of  Lo- 
comotive Firemen,  the  Brotherhood  of  Rail- 
road Trainmen,  the  Order  of  Railroad  Tele- 
graphers, the  International  Brotherhood  of 
Maintenance  of  Way  Employees,  and  the 
Switchmen's  Union  of  North  America.  The 
unions  of  the  engineers,  conductors,  firemen, 
and  trainmen  insure  a  total  of  210,000  men 
for  an  aggregate  of  $248,000,000,  an  average 
of  $1180  per  member.  The  rates  in  these  bro- 

*  Johns  Hopkins  Studies  in  Historical  and  Political  Science,  vol. 
26,  Nos.  11  and  12. 


32 


ACCIDENT  COMPENSATION 


therhood  insurance  associations,  compared 
with  those  in  a  private  industrial  insurance 
company,  are  shown  in  Table  XIV. 

TABLE  XIV 

INDUSTRIAL   INSURANCE   RATES   PER   $1000  FOB  RAILWAY 
EMPLOYEES 


Brotherhood 

Insurance 

rate 

company  rates  * 

Engineers 

$17.80 

$27.23 

Conductors 

16. 

22.23 

Firemen 

12. 

27.23 

Trainmen 

18. 

27.23 

Telegraphers 

7.20 

22.23 

Switchmen 

20. 

27.23 

Maintenance  of 

way  employees 

(12. 
18. 

27.23 

In  addition  to  the  railway  brotherhoods, 
the  following  trades  have  well  organized  union 
benefit  features:  boot  and  shoe  workers,  bak- 
ers, carpenters,  cigar-makers,  glass-workers, 
granite-cutters,  iron-moulders,  leather-work- 
ers, metal-workers,  machinists,  painters,  pat- 
tern-makers, piano  and  organ  workers,  tailors, 
typographers,  and  wood-workers.^  In  the 
case  of  none  of  these  unions,  however,  is  the 
death  benefit  paid  in  excess  of  five  hundred 
dollars,  and  in  some  it  is  a  mere  funeral  benefit 
as  low  as  forty  or  fifty  dollars.    The  average 

^  These  rates  are  those  of  the  ^tna  Insurance  Company  for  men 
insuring  at  thirty-five  years  of  age. 

*  Johns  Hopkins  Studies  in  Historical  and  Political  Science,  vol.  26, 
Nos.  11  and  12. 


COMPENSATION  BY  PRIVATE  AGENCIES  33 

is  about  one  hundred  dollars.  Moreover, 
many  restrictions  are  placed  upon  eligibility 
to  membership  in  the  insurance  associations, 
that  greatly  lessen  their  value  as  agencies  for 
the  compensation  of  losses  by  industrial  acci- 
dents.  Professor  Henderson  says :  —  _ 

So  far  as  we  can  draw  conclusions  from  correspond- 
ence with  the  unions  in  affiliation  with  the  American 
Federation  of  Labor,  it  must  be  said  that  they  have 
rarely  achieved  important  results  in  the  field  of  acci- 
dent insurance.  ^  -^ 

A  number  of  companies  do  a  so-called  in- 
dustrial insurance  business.  The  custom  of 
carrying  life  insurance  sufficient  to  cover  fune- 
ral expenses,  —  in  some  cases  upon  each  mem- 
ber of  the  family,  —  is  very  common  among 
working  people.  This  is  a  source  of  ready 
relief  in  case  of  death  by  industrial  accident, 
but  the  benefits  come  at  high  cost.  For  a  man 
insuring  at  twenty -five,  the  rate  in  the  indus- 
trial department  of  the  Prudential  Insurance 
Company  of  America,  a  leading  concern  doing 
this  class  of  business,  is  fifty  cents  per  week 
upon  $760.  In  the  New  York  Life  Insurance 
Company,  on  the  other  hand,  $21.49  per  year 
pays  the  premium  on  a  full  thousand.^  The 

*  Industrial  Insurance  in  the  United  States,  by  Charles  R.  Hender- 
son, p.  88. 
^    ^  Policy-holders'  dividends  usually  reduce  this  cost  by  about  $3.50. 


34  ACCIDENT  COMPENSATION 

premium  on  the  industrial  policy  is  thus  59 
per  cent  greater  than  on  the  ordinary  life  in- 
surance policy.  This  is  readily  accounted  for 
by  the  higher  mortality  rates  among  working 
people  and  by  the  expensive  custom  of  col- 
lecting premiums  each  week.  Moreover,  the 
average  policy  of  the  industrial  class  is  only 
$142,  while  in  the  ordinary  life  insurance  com- 
pany it  is  $2468.  The  workingman  buys  his 
insurance,  like  his  food  and  his  fuel,  in  small 
quantities,  and  the  necessity  of  doing  so  in- 
creases the  expense. 

The  same  statements  are  true  of  regular 
accident  insurance.  The  rates  are  so  high  that 
benefits  are  necessarily  limited.  Some  rail- 
road companies,  among  which  are  the  Illinois 
Central  and  the  Chicago  and  Alton,  make 
special  arrangements  whereby  such  insurance 
on  the  part  of  employees  is  encouraged;  the 
latter  company  even  pays  from  30  to  50  per 
cent  of  the  premiums.  But  the  rates  of  the  \, 
casualty  companies  are  very  high,^  the  pay- 
ments are  small,  and,  although  such  insur- 
ance is  valuable  under  existing  conditions,  it 
throws  most  of  the  heavy  expense  of  accident 
compensation  upon  the  workers  themselves, 
making  adequate  insurance  impossible. 

*  Casualty  company  rates  upon  railroad  employees  run  from  33 
per  cent  to  67  per  cent  higher  than  corresponding  charges  under 
the  brotherhood  insurance  plans. 


COMPENSATION  BY  PRIVATE  AGENCIES  35 

An  investigation  has  been  made  under  the 
direction  of  the  New  York  Employers'  Lia- 
bility Commission  of  all  fatal  industrial  acci- 
dents, a  total  of  280,  in  Erie  County  (Buffalo) 
during  1908,  and  in  the  Borough  of  Man- 
hattan of  the  city  of  New  York  during  1907 
and  1908.  In  137  cases  out  of  280,  insurance 
in  some  form  was  carried  by  the  deceased,  — 
72  insurance  companies,  17  trades  unions,  48 
fraternal  orders,  and  4  relief  associations  fig- 
uring in  the  investigation.  In  16  cases,  or  5.7 
per  cent,  the  insurance  paid  was  under  $100; 
in  71  cases,  or  25.4  per  cent,  the  payment  was 
between  $100  and  $500;  in  21  cases,  or  7.5 
per  cent,  it  was  between  $500  and  $1000;  in 
25  cases,  or  9  per  cent,  it  was  between  $1000 
and  $2000;  and  in  only  8  cases,  or  2.9  per  cent, 
was  a  sum  paid  of  $2000  or  over.  The  aver- 
age amount  was  $667.40.  This  latter  sum  is 
but  82  per  cent  of  the  average  yearly  wages 
of  the  men  killed.  A  further  investigation  was 
made  of  1482  cases  of  industrial  accidents 
in  the  state  in  1907,  including  those  result- 
ing in  either  fatal  or  non-fatal  injury.  In 
367  cases  of  temporary  disability,  insurance 
yielded  an  average  of  $35.56;  in  20  cases  of 
permanent  disability,  insurance  amounted  to 
an  average  of  $110.85;  and  in  35  cases  of  fatal 
injury,  insurance  averaging  $522.88  was  col- 
lected. 


36  ACCIDENT  COMPENSATION 

As  a  consequence  of  growing  public  sym- 
pathy for  the  victims  of  industrial  accidents, 
many  employers  have  voluntarily  adopted 
schemes  for  substantial  compensation.  A  fa- 
vorite way  of  doing  this  is  to  allow  wages  to 
continue  through  the  period  of  temporary 
disability.  Out  of  348  cases  of  injury  to  work- 
men in  the  state  of  Michigan  in  1905,  upon 
which  reports  were  made  concerning  compen- 
sation, in  172  cases  the  employers  allowed  full 
wages  to  continue  during  the  time  of  unem- 
ployment, —  an  average  of  thirty -three  days. 
The  New  York  Edison  Company  pays  about 
$10,000  a  year  in  wages  to  injured  employees. 
Although  this  is  actuated  in  part  by  the  hu- 
mane motives  of  the  employer,  and  is  of  com- 
pensatory value,  it  is  also  doubtless  intended 
to  conciliate  the  injured  worker,  and  so  lessen 
the  chances  of  his  bringing  suit,  and  thus  to 
buy  cheaply  a  release  from  further  liability.  ^ 

*  In  a  case  that  came  under  the  direct  observation  of  the  writer, 
the  caving  in  of  a  ditch,  due  to  the  neglect  of  a  foreman,  had  crushed 
the  chest  and  lungs  of  a  plumber.  A  member  of  the  employing  firm 
was  admitted  to  the  hospital  to  see  him  on  the  day  of  the  accident. 
With  sympathetic  suavity  the  employer  inquired  after  the  patient's 
welfare  and  in  particular  concerning  the  probable  duration  of  his 
disablement.  The  plumber  repeated  the  indefinite  guess  of  the  sur- 
geon that  it  would  be  "  at  least  six  weeks."  Upon  seeing  this  open- 
ing for  a  bargain,  the  good  Samaritan  was  at  once  transformed  into 
the  acute  business  man  and  made  the  following  proposition :  to  pay 
full  wages  together  with  physician's  fees  and  hospital  expenses, 
for  six  weeks,  in  exchange  for  the  signature  of  the  employee  to  a 
release  of  the  employer  from  further  liability. 


COMPENSATION  BY  PRIVATE  AGENCIES  37 

Following  one  of  the  greatest  disasters  in 
the  history  of  American  industry  —  the  fire 
on  November  13,  1909,  in  the  mine  of  the 
St.  Paul  Coal  Company  at  Cherry,  Illinois  — 
the  voluntary  settlements  have  been  mark- 
edly liberal.  Of  the  258  men  who  lost  their 
lives  in  the  mine,  84  were  single,  168  married, 
four  were  widowers,  one  divorced,  and  one 
unknown.  Those  married  left  382  children 
under  sixteen  years  of  age.  To  provide  for 
the  immediate  relief  of  the  widows,  orphans, 
and  other  dependents,  the  coal  company  al- 
lowed wages  to  continue  for  about  two  weeks,  ^ 
and  provided  free  rent  and  coal  throughout 
the  winter.  The  Chicago,  Milwaukee,  and 
Saint  Paul  Railroad  Company,  of  which  the 
coal  company  is  in  effect  a  subsidiary  concern, 
was  very  generous  in  providing  transporta- 
tion facilities  for  the  local  relief  committee. 
In  February  the  officials  of  the  coal  company 
offered  settlement  on  the  basis  of  $800  to  the 
heirs  of  each  unmarried  victim  and  $1,800  to 
each  widow.  This  has  been  accepted  in  the 
majority  of  cases.  Attorneys'  fees  are  ten  per 
cent  of  the  sums  so  collected.^ 

*  As  two  weeks'  pay  was  always  held  back,  the  payment  of  wages 
thus  continued  for  four  weeks  following  the  disaster. 

*  In  addition  to  these  company  aids,  the  United  Mine  Workers  of 
America  made  payments  of  $150  each  to  the  dependents  of  about 
230  men  within  the  month  following  the  disaster,  and  there  is  now. 
May,  1910,  over  a  quarter-million  dollars,  —  $100,000  especially  ap- 


38  ACCIDENT  COMPENSATION 

The  extraordinary  hazard  of  railway  em- 
ployment, and  the  severe  public  criticism  and 
expensive  litigation  which  invariably  follow 
accidents,  led  to  the  organization,  at  an  early 
date,  of  railway  relief  departments.  These 
schemes  usually  provide  hospital  care  and  sur- 
gical treatment  for  injured  men,  and  include 
insurance  features  promising  substantial  death 
payments  and  disability  benefits.  Liberal  aids 
and  guarantees  are  usually  granted  by  the 
companies,  although  the  greater  portion  of  the 
expense  is  deducted  from  the  pay-checks  of 
employees.  These  railroad  departments  are 
generally  successful  in  providing  temporary 
relief,  and  many  similar  schemes  have  been 
introduced  into  other  industrial  plants. 

The  following  statement  of  the  main  fea- 
tures of  nineteen  important  relief  systems 
operated  by  industrial  concerns,  mercantile 
houses,  and  transportation  companies,^  illus- 
trates the  work  of  this  class  of  compensation 
agencies.   In  sixteen  of  these  systems,  yearly 

propriated  by  the  Illinois  legislature,  $70,000  contributed  by  the 
United  Mine  Workers  of  America,  and  $90,000  remaining  of  the  Red 
Cross  fund,  —  which  will  be  scientifically  administered  for  the  per- 
manent relief  of  dependents.  It  must  be  borne  in  mind,  however, 
that  the  spectacular  character  of  a  catastrophe  like  this  calls  forth 
great  public  sympathy.  Each  of  thousands  of  men  picked  off  one  by 
one  each  year  calls  forth  far  less  than  a  proportionate  share  of  public 
interest.  It  is  for  this  reason  that  the  industrial  accident  problem 
must  be  studied  closely  before  its  acuteness  becomes  apparent. 

*  Described  by  Henderson,  Industrial  Insurance  in  the  United 
States,  chapters  ii  and  vii. 


COMPENSATION  BY  PRIVATE  AGENCIES  39 

dues  average  $12.95  per  member;  in  one  sys- 
tem it  is  two  per  cent  of  wages;  in  another, 
assessments  are  levied  only  as  needed;  and  in 
the  remaining  case  the  amount  of  the  dues  is 
not  stated.  Most  companies  pay  operating 
expenses,  some  make  annual  contributions, 
often  very  generous,  and  others  pay  a  stated 
percentage  —  in  one  case  as  high  as  fifty  per 
cent  —  of  the  payments  made  by  employees. 
The  death  benefits  of  thirteen  of  these  systems 
average  $450;  in  four  they  are  not  stated;  in 
one  the  payment  is  equal  to  two  years'  wages; 
and  in  another,  $50  and  a  small  pension  for 
two  years  to  dependent  heirs.  In  fifteen  cases, 
injury  benefits  average  eight  dollars  a  week,  in 
one  it  is  half  wages,  in  another  three-fourths 
of  a  special  levy,  and  in  the  remaining  two  it 
is  not  stated.  In  regard  to  the  duration  of 
the  payment  of  benefits,  one  organization  pays 
for  as  long  as  two  years,  and  two  make  pay- 
ments for  one  year,  but  the  average  is  thirty- 
five  weeks.  In  three  cases  the  company  makes 
membership  in  the  relief  departments  a  con- 
dition of  employment;  and  the  rules  of  the 
department  in  three  companies  attempt  to 
limit  the  freedom  of  injured  members  receiv- 
ing benefits  to  seek  legal  satisfaction  from  the 
employer.  In  ten  cases  members  and  com- 
pany exercise  joint  powers  of  administration; 
in  three  cases  there  is  full  company  control. 


40  ACCIDENT  COMPENSATION 

One  of  the  strongest  of  these  relief  systems 
has  been  conducted  for  over  twenty  years  by 
the  Chicago,  Burlington,  and  Quincy  Railroad 
Company.  The  company  pays  all  expenses 
of  administration,  while  members  of  the  relief 
department  pay  very  moderate  rates  gradu- 
ated according  to  the  amount  of  the  benefits 
guaranteed.  Insurance  against  disability  from 
either  sickness  or  accident  provides  for  bene- 
fits of  from  fifty  cents  to  two  dollars  and  fifty 
cents  a  day.  In  case  of  sickness,  benefits  are 
paid  for  a  maximum  period  of  one  year  at  full 
rates,  and  for  an  additional  year,  if  disability 
continues,  at  one  half  rates.  In  accident  cases 
the  benefits  are  the  same,  except  that  pay- 
ments continue  as  long  as  the  member  is  dis- 
abled. Death  benefits  run  from  $300  to  $6000. 
The  victims  of  accidents  resulting  in  perma- 
nent partial  disability  receive  either  a  perma- 
nent benefit  or  a  lump  payment,  as  may  be 
agreed  upon.  Similar  relief  organizations  exist 
on  many  large  railroad  systems,  especially  on 
those  in  the  East. 

During  the  year  ending  December  31,  1909, 
the  relief  system  of  this  railroad  company  had 
enrolled  27,752  members,  or  57.37  per  cent  of 
all  persons  employed  on  the  road,  and  over 
80  per  cent  of  those  permanently  employed. 
These  members  paid  into  the  treasury  a  total 
for  the  year  of  $545,595.12,  an  average  of 


COMPENSATION  BY  PRIVATE  AGENCIES  41 

$19.70.  A  total  of  $573,646.01  was  paid  out  in 
benefits  on  16,459  cases.  Of  these  cases,  8063, 
or  48.9  per  cent,  were  due  to  accidents,  either 
on  or  off  duty;  and  of  the  total  benefits  paid, 
$309,485.34,  or  53.9  per  cent,  was  on  account 
of  accidents.  The  remainder  was  chargeable 
to  sickness. 

As  a  consideration  [says  the  superintendent  of  the 
relief  system]  for  the  amounts  paid  by  the  company 
for  the  maintenance  of  the  relief  department,  the  facili- 
ties furnished,  the  guarantee  of  payment  of  benefits, 
etc.,  the  members  agree  that  in  the  event  of  injury 
they  will,  after  the  injury,  elect  whether  to  accept  bene- 
fits, which  acceptance  is  to  operate  as  a  release  of  all 
claims  for  damages  against  the  company  on  account 
of  that  particular  injury,  or,  instead  thereof,  to  decline 
benefits  and  look  to  the  company  for  damages.  They 
cannot  do  both. 

It  should  be  noted  in  this  connection,  that 
the  actual  cash  contribution  of  the  company 
between  June  1,  1889,  and  December  31, 
1909,  was  $1,330,544.13,  or  17.7  per  cent  of 
the  total  receipts. 

A  more  recently  organized  system,  upon 
the  creation  of  which  a  great  amount  of  careful 
study  has  been  expended,  is  the  Employees' 
Benefit  Association  of  the  International  Har- 
vester Company  and  aflSliated  companies. 
The  plan  was  instituted  on  September  1, 1908. 
It  provides  for  payments  from  members  of 
two  per  cent  of  their  wages,  deducted  each 


42  ACCIDENT  COMPENSATION 

pay-day,  and  from  the  company  of  $50,000  a 
year.  Disability  from  either  accident  or  sick- 
ness entitles  the  injured  member  to  one  half 
wages  for  not  over  one  year;  the  amount  of  the 
insurance  against  death  from  sickness  is  one 
year's  wages;  against  death  from  accident,  two 
years'  wages.  In  case  of  permanent  partial 
disability,  proportionate  benefits  may  be  paid 
in  a  lump  sum,  and  in  case  of  chronic  sickness 
or  grave  injury,  similar  settlements  may  be 
made  by  mutual  agreement.^  In  marked  con- 
trast to  the  policy  of  the  railroad  relief  depart- 
ment described  above,  the  International  Har- 
vester Company  makes  no  effort  to  limit  the 
right  of  beneficiaries  to  seek  legal  satisfaction 
for  injuries  received.  "Members  who  receive 
benefits,  either  disability  or  death  benefits,'* 
says  an  oflScer  of  the  company,  "are  not  re- 
quired to  sign  a  release  in  any  form,  releasing 
the  company  from  liability." 

During  the  first  sixteen  months  that  the 
plan  was  in  operation,  —  September  1,  1908, 
to  December  31,  1909,  —  the  average  enroll- 
ment was  74.9  per  cent  of  all  men  employed. 
On  the  latter  date,  23,578  memberships  were 
in  force.  The  net  contributions  from  members 
amounted  to  $350,397.28,  —  the  company 
contribution  of  $50,000  being  14.3  per  cent  of 

'  This  plan  provides  for  a  special  benefit  equal  to  one  half  wages 
for  three  months  for  women  employees  who  become  pregnant.      _^ 


COMPENSATION  BY  PRIVATE  AGENCIES  43 

this  amount.  During  the  same  time,  $107,- 
179.11  was  paid  out  in  129  death  benefits,  — 
an  average  of  $830.85,  —  and  $120,071.21  was 
paid  out  in  7863  disabihty  benefits,  —  an 
average  of  $15.27  each.^ 

A  plan  of  relief  for  industrial  accident  vic- 
tims in  which  the  company  bears  the  entire 
expense  was  put  in  effect  for  one  year's  trial 
on  May  1,  1910,  by  the  United  States  Steel 
Corporation.  The  most  progressive  feature 
of  this  plan  is  the  graded  scale  of  benefits, — 
the  amount  paid  depending  not  only  upon  the 
number  of  years  spent  in  the  service  of  the 
company,  but  also  upon  the  conjugal  condi- 
tion of  the  injured  man  and  on  the  number  of 
children  dependent  upon  him. 

In  case  of  temporary  disability  an  unmar- 
ried man  receives  from  the  company,  under 
this  plan,  35  per  cent  of  his  wages  during  the 
time  of  incapacity;  a  married  man,  50  per 
cent;  and  in  each  case  the  employee  receives 
two  per  cent  additional  for  each  year  of  ser- 
vice over  five  years.  Five  per  cent  additional 
is  paid  for  each  child  under  sixteen  years  of 
age.  In  temporary  disablement  cases,  however, 
benefits  do  not  begin  for  ten  days;  they  may 
not  continue  for  longer  than  one  year;  and, 

^  With  the  addition,  early  in  1910,  of  a  second  and  supplemen- 
tary relief  plan  as  described  hereafter,  the  Harvester  Company  now 
doubtless  provides  the  most  liberal  accident  relief  of  any  large 
American  employer.  , 


44  ACCIDENT  COMPENSATION 

if  the  beneficiary  is  unmarried,  he  is  limited 
to  $1.50  a  day,  and  if  married,  to  $2.00  a  day. 
The  benefits  paid  for  permanent  disabihty  are 
intended  to  vary  according  to  the  circum- 
stances of  the  individual  cases.  The  amount 
is  left  entirely  to  the  discretion  of  the  admin- 
»istrative  ofiicers,  but  is  expected  to  conform 
as  far  as  possible  to  the  following  schedule: 

For  the  loss  of  a  hand,  one  year's  wages. 
For  the  loss  of  an  arm,  eighteen  months* 
wages. 

For  the  loss  of  a  foot,  nine  months'  wages. 
For  the  loss  of  a  leg,  one  year's  wages. 
For  the  loss  of  an  eye,  six  months'  wages. 

Death  benefits  include  funeral  expenses  of 
not  more  than  $100  and,  in  the  case  of  mar- 
ried men,  a  payment  to  widows  and  children 
of  eighteen  months'  wages,  increased'by  three 
per  cent  for  each  year  of  service  in  excess  of 
five  years,  and  by  ten  per  cent  for  each  child 
under  sixteen  years  of  age.  No  payments  be- 
yond funeral  expenses  are  ordinarily  made  on 
account  of  the  death  of  unmarried  men,  but 
in  case  dependents  are  left,  the  officers  admin- 
istering the  plan  may  take  wide  latitude  in 
the  exercise  of  judgment.  In  addition  to  these 
benefits,  the  corporation  continues  its  former 
policy  of  providing  free  hospital  care  and  sur- 
gical treatment. 


COMPENSATION  BY  PRIVATE  AGENCIES  45 

The  Steel  Corporation  has  tied  one  string  to 
its  beneficence.   Its  announcement  says :  — 

No  relief  will  be  paid  to  any  employee  or  his  family 
if  suit  is  brought  against  the  company.  .  .  .  All  em- 
ployees of  the  company  who  accept  and  receive  any  of 
this  relief  will  be  required  to  sign  a  release  to  the  com- 
pany. 

In  speaking  of  death  benefits  in  particular,  the 
statement  is  made  that  "in  no  case  will  this 
relief  be  paid  until  the  receipt  by  the  company 
of  a  satisfactory  release  properly  executed." 
Yet  this  is  only  natural,  since  employees  bear 
no  part  of  the  expense.  A  fair  comparison  can- 
not be  made  between  this  plan,  in  which  the 
employer  pays  the  entire  cost  of  relief,  and 
other  systems,  in  which  employees  pay  the 
greater  part  of  it;  and  the  Steel  Corporation 
has  laudably  avoided  the  untenable  position 
in  which  many  employers  have  placed  them- 
selves by  attempting  to  purchase  legal  release 
with  funds  to  which  the  injured  men  them- 
selves had  previously  contributed.  The  suf- 
ficiency of  the  payments  may  also  be  called 
in  question,  —  especially  of  those  made  on 
account  of  fatal  injuries.  But  the  careful  gra- 
dation of  the  benefits  according  to  the  prob- 
able needs  of  the  victim  marks  the  plan  as  one 
of  the  best  compensation  schemes  yet  adopted 
in  the  United  States,  while  the  fact  that  it 
protects  nearly  a  quarter  of  a  million  workmen 


46  ACCIDENT  COMPENSATION 

stimulates  a  keen  public  interest  in  its  experi- 
mental operation. 

On  the  same  day  that  the  relief  scheme  of 
the  Steel  Corporation  became  effective,  May 
1,  1910,  the  International  Harvester  Com- 
pany started  an  accident  relief  plan,  which, 
though  supplementing  the  work  of  the  Em- 
ployees' Benefit  Association  described  above, 
is  entirely  independent  of  it.  It  is  closely 
comparable  to  that  of  the  Steel  Corporation; 
compensation  is  paid  regardless  of  the  legal 
defenses  the  employer  might  set  up,  the  com- 
pany bears  all  of  the  expense,  a  release  to  the 
company  in  legal  form  is  a  sine  qua  non  of 
benefit  payment,  and  the  scale  of  compensa- 
tions is  scientifically  graded.  Payments  by 
the  Harvester  Company  are,  however,  mark- 
edly more  liberal  than  by  the  Steel  Corpora- 
tion. In  case  of  death,  three  years'  wages,  but 
not  more  than  $4000  nor  less  than  $1500,  is 
paid  to  the  surviving  widow,  children,  or  other 
dependent  relatives.  For  the  loss  of  a  hand  or 
foot  a  special  benefit  of  one  and  one  half  year's 
wages  is  paid,  but  not  less  than  $500  nor  more 
than  $2,000,  and  for  the  loss  of  two  limbs  four 
years'  wages,  but  not  less  than  $2,000.  For 
the  loss  of  an  eye,  the  compensation  is  three 
fourths  of  one  year's  wages,  and  for  the  loss 
of  both  eyes,  four  years'  wages,  but  not  less 
than  $2,000.  During  the  first  thirty  days  of 


COMPENSATION  BY  PRIVATE  AGENCIES  47 

disability,  the  benefit  is  one  fourth  wages,  but 
this  may  be  increased  by  an  equal  amount  if  the 
injured  employee  has  previously  contributed 
to  a  special  fund  for  the  purpose.  After  thirty 
days,  the  company  pays,  for  a  maximum  time 
of  two  years,  one  half  wages.  These  payments 
are  limited  to  twenty  dollars  per  week.  After 
two  years  an  annual  pension  is  paid  to  men 
totally  disabled,  equal  to  about  one  fourth 
of  wages,  but  not  less  than  ten  dollars  per 
month.  The  operation  of  this  plan  will  be 
watched  with  no  less  interest  than  that  of  the 
United  States  Steel  Corporation,  for  both  re- 
present a  marked  recognition  by  capital  of  its 
responsibility  for  the  welfare  of  the  working 
class. 

A  form  of  relief  for  industrial  injury  which 
has  been  widely  discussed  in  recent  years,  and 
which  has  promising  features  as  a  preliminary 
step  to  the  development  of  a  comprehensive 
policy  of  industrial  accident  compensation,  is 
workmen's  collective  insurance,  —  an  agency 
of  special  value  in  factories  too  small  for  the 
formation  of  strong  relief  departments.  Poli- 
cies are  written  by  casualty  companies  in  the 
name  of  the  employer,  and  are  blanket  con- 
tracts, covering  all  employees  or  specified 
classes  of  them.  The  scale  of  prevalent  com- 
pensations under  such  policies,  as  given  by  the 
**  Insurance  Year  Book  "  for  1908,  is  as  follows : 


48  ACCIDENT  COMPENSATION 

death,  the  loss  of  two  limbs,  or  of  sight,  en- 
titles the  victim  or  his  heirs  to  from  one  to  one 
and  one  half  years'  wages;  the  loss  of  one 
limb,  one  third  of  one  year's  wages;  the  loss 
of  one  eye,  one  eighth  of  one  year's  wages ;  and 
temporary  disability  is  compensated  by  the 
payment  of  half  wages  for  a  maximum  period 
of  twenty-six  weeks.  Free  medical  attendance, 
and  insurance  for  the  entire  twenty -four  hours 
of  the  day  may  be  added  to  the  provisions  of 
the  contract  at  a  slightly  increased  cost.  Pre- 
miums are  based  on  pay-roll  totals.  They  are 
sometimes  paid  by  the  employer,  but  the 
workmen  themselves  usually  pay  a  part,  and 
often  the  entire  amount.  In  many  cases  the 
insurance  company  even  allows  the  employer 
a  commission  for  deducting  the  premium 
from  pay-checks  and  remitting  it.  Rates  are 
from  one  to  one  and  one  half  per  cent  of  wages 
for  insurance  providing  a  full  year's  wages  in 
case  of  death  or  serious  permanent  disability, 
and  one  half  wages  during  temporary  incapa- 
city. 

In  addition  to  the  heavy  cost  entailed,  and 
to  the  fact  that  it  is  usually  thrown  upon  the 
workmen  themselves,  many  of  these  policies 
are  open  to  further  objections.  As  stated  in 
the  policy  form  of  one  of  these  companies,  the 
compensation  for  death  or  permanent  disa- 
bility is  limited  to  $1500;  for  temporary  dis- 


COMPENSATION  BY  PRIVATE  AGENCIES  49 

ability,  to  $500 ;  and  the  total  liability  of  the 
company  for  a  single  accident  cannot  exceed 
$10,000.  Many  of  these  companies  attempt 
further,  as  do  the  relief  societies,  to  restrict 
the  legal  power  of  the  injured  workman  to  sue 
his  employer. 

In  general  it  may  be  said  that  the  relief 
work  of  employers  is  more  comprehensive  than 
that  of  workmen's  cooperative  agencies.  But 
much  is  still  lacking.  Of  the  526  deaths  from 
industrial  accidents  in  Allegheny  County  in 
one  year,  as  found  by  the  Pittsburg  Survey, 
304  were  of  men  supporting  other  persons. 
Of  these,  181  were  wholly  uncompensated, 
and  the  dependents  of  but  61  received  more 
than  $500.  The  disparity  between  the  large 
potential  loss,  in  wages,  to  the  workers,  and 
the  limited  compensation  paid  by  the  employ- 


Loss  to  workmen  (black  circle),  $123,065.  ' 
Total  compensation  (white  circle),  $520. 

ers,  is  illustrated  by  the  circles  above,  which 
are  based  upon  earnings  and  expectation  of 


50  ACCIDENT  COMPENSATION 

life  in  six  actual  cases  of  men  permanently  dis- 
abled in  the  industries  of  Pittsburg.^ 

Efforts  at  cooperative  relief  on  the  part  of 
employees  are  numerous,  and  it  is  clear  that 
they  are  fairly  successful ;  but  the  benefits  paid 
are  inadequate  for  full  compensation]  Life  and 
accident  insurance  are  common  among  work- 
ing people;  but  the  Qost  is  excessive,  and  the 
indemnities  are  small.  The  efforts  of  employers 
to  provide  for  accident  relief  are  more  com- 
prehensive. Voluntary  payments  and  wages 
during  temporary  disability  are  often  given, 
but  the  payments  are  usually  small,  and  wages 
are  unlikely  to  continue  during  permanent 
disability.  Industrial  relief  departments  are 
numerous  and  successful,  but  the  cost  is  borne 
mainly  by  employees,  and  unfair  conditions 
are  often  laid  down.  Workmen's  collective  in- 
surance finds  favor,  but  it  is  open  to  the  same 
criticism  that  applies  to  the  relief  depart- 
ments. It  therefore  seems  evident  that  these 
numerous  agencies,  while  of  unquestionable 
value,  are  too  spasmodic  and  fragmentary 
in  their  work  to  afford  an  adequate  system 
of  industrial  accident  compensation. 

*  Diagram  from  Charities  and  the  Commons,  March  6,  1909,  p. 
1174. 


CHAPTER  IV 

EMPLOYERS*    LIABILITY    IN    THE    UNITED 

STATES  ^ 

The  liability  of  a  person,  firm,  or  corporation 
for  damages  arising  out  of  a  personal  injury 
befalling  an  individual  because  of  the  omis- 
sion of  a  duty  or  the  commission  of  a  careless 
act,  is  of  long  standing  in  the  English  common 
law.  This  fundamental  principle,  which  is 
based  only  upon  the  fault  of  the  employer, 
together  with  legislative  enactments  and  judi- 
cial interpretations  that  supplement  its  appli- 
cation to  the  relations  of  master  and  servant, 
affords  a  basis  upon  which  compensation  for 
industrial  accidents  may  be  secured  through 
legal  action.  The  status  of  the  law  of  em- 
ployers' liability  in  the  United  States  will  be 
discussed  briefly,  first,  in  its  relation  to  the 
common  law,  then,  in  regard  to  legislative 
enactments,  and  finally  respecting  the  prac- 
tical results  of  its  application. 

*  No  effort  has  been  made  to  present  an  exhaustive  study  of  the 
subject  of  this  chapter.  A  very  full  statement  of  the  common  law 
principles  and  judicial  interpretations,  together  with  the  text  of 
statutory  enactments  in  the  American  states,  may  be  found  in 
Bulletin  of  the  United  States  Bureau  of  Labor,  No.  74  (January, 
1908). 


52  ACCIDENT  COMPENSATION 

The  common-law  principles  here  involved 
fall  under  three  heads, — the  law  of  negligence, 
the  doctrine  of  assumed  risks,  and  the  fellow- 
servant  doctrine. 

It  has  long  been  recognized  in  the  common 
law'  that  he  whose  negligence  has  led  to  the 
injury  of  a  fellow  man  may  be  held  financially 
responsible  for  damages.  This,  in  brief,  is  the 
law  of  negligence.  Linked  closely  to  it  is  the 
principle  of  respondeat  superior,  which  was 
first  laid  down  in  1697  in  the  case  of  Tuber- 
ville  vs.  Stampe.  The  court  asserted  that  he 
who  chooses  the  convenience  of  delegating  to 
others  the  performance  of  his  personal  and 
business  services  is  as  responsible  for  injuries 
brought  about  in  doing  them  as  if  he  were 
himself  the  direct  agent.  In  other  words,  the 
master  must  answer  for  the  negligence  of 
the  servant.  Shortly  after  this,  in  the  case 
of  Thomas  vs.  Quartermaine,  the  principle  of 
contributory  negligence  was  enunciated.  If 
the  plaintiff,  it  was  averred,  had  so  contributed 
to  the  causes  of  the  accident  that  the  breach 
of  duty  on  the  part  of  the  defendant  was  not 
its  proximate  cause,  then  he,  the  plaintiff,  had 
no  ground  for  action. 

The  law  of  negligence  is  general  in  its  pro- 
visions,—  no  distinction  is  made,  up  to  this 

»  The  relation  of  the  common  law  to  employers'  liability  is  ably 
discussed  in  The  Law  of  Employers'  Liability,  by  Augustine  Birrell. 


LAW  OF  EMPLOYERS'  LIABILITY       53 

point,  between  those  who  are  servants  of  the 
neghgent  party  and  those  who  are  not.  The 
servant  is  the  fellow  man  of  the  master,  and 
reasonable  precaution  against  injury  is  due 
him.  But,  in  the  last  two  maxims  of  the  com- 
mon law  relating  to  employers'  liability,  — 
the  doctrine  of  assumed  risks  and  the  fellow- 
servant  doctrine, — important  distinctions  are 
set  up  between  those  who  are  employees  and 
those  who  are  not,  and  the  accountability  of 
the  master  for  injuries  befalling  his  servants 
is  limited  accordingly. 

I  The  doctrine  of  assumed  risk  was  the  first 
of  these  maxims  to  be  declared.^  He  who 
knowingly  places  himself  in  danger  of  personal 
injury  by  accepting  hazardous  employment, 
assumes,  therewith,  the  risk  of  injury.  No 
one  is  in  a  better  position  to  know  the  danger- 
ous character  of  his  work,  says  this  dogma, 
than  the  workman  himself.  He  can  therefore 
demand  wages  commensurate  with  the  risk 
involved.  If,  for  any  reason,  the  danger  in  his 
particular  position  is  greater  than  might  or- 
dinarily be  expected,  his  legal  duty  is  to  give 
up  his  employment  or  to  obtain  a  promise 
from  the  employer  to  make  right  the  abnormal 
situation.  A  free  citizen,  says  this  legal  theory, 

*  See  "Employers'  Liability,"  an  address  before  the  Illinois  State 
Bar  Association  by  Professor  Floyd  R.  Meacham,  published  in  the 
Illinois  Law  Review,  vol.  iv,  p.  243. 


54  ACCIDENT  COMPENSATION 

may  work  under  danger  or  not,  just  as  he 
chooses.  If  he  chooses  to  do  so,  then  he  has 
assumed  the  risk  of  injury. 

Of  these  common-law  principles,  of  which 
two  have  been  discussed,  the  most  noteworthy, 
curiously  enough,  did  not  appear  until  1837. 
In  that  year  the  fellow-servant  doctrine,  a 
broad  amplification  of  the  doctrine  of  assumed 
risk,  was  laid  down  in  deciding  the  case  of 
Priestly  vs.  Fowler.  It  asserts  that  danger  of 
injury  through  the  negligence  of  another  ser- 
vant of  the  same  master  is  a  known,  common, 
and  ever-present  risk  of  working  in  company 
with  others,  and  that  consequently,  —  in  ac- 
cordance with  the  doctrine  of  assumed  risk, 
—  a  worker  so  injured  has  no  ground  for  ac- 
tion against  his  employer. 

These  principles  of  the  common  law,  to- 
gether with  statutory  changes  and  judicial 
interpretations,  form  our  existing  law  of  em- 
ployers' liability.  The  law  of  negligence  and 
the  doctrine  of  assumed  risk  had  already  been 
transplanted  bodily  from  England  into  the 
United  States  when  our  law  entered  upon  its 
independent  development.  Although  the  fel- 
low-servant doctrine  was  not  enunciated  in 
England  until  long  afterward,  it  soon  found 
recognition  in  American  courts,  —  in  the  case 
of  Murray  vs.  the  South  Carolina  Railway 
Company,  decided  in  1841  in  South  Carolina, 


LAW  OF  EMPLOYERS'  LIABILITY      55 

and  in  Farwell  vs.  the  Boston  and  Worcester 
Railroad  Company,  decided  in  1842  in  Mas- 
sachusetts.^ In  deciding  the  latter  case  the 
court  said:  "These  are  perils  which  the  ser- 
vant is  as  likely  to  know,  and  against  which 
he  can  as  effectually  guard,  as  the  master. 
They  are  perils  incident  to  the  service,  and 
which  can  be  as  distinctly  foreseen  and  pro- 
vided for  in  the  rate  of  compensation  as  any 
others." 

In  almost  all  the  states  and  territories,  modi- 
fications and  extensions  of  these  common-law 
doctrines  have  been  made  by  legislative  enact- 
ment. A  general  analysis  of  these  statutory 
provisions  will  show  the  wide  variation  of  the 
obligations  imposed  by  employers'  liability 
laws  in  different  states. 

Statutory  changes  have  been  made  in  all 
but  six  of  the  states  and  territories,  but  in 
only  sixteen  of  these  states  are  the  enact- 
ments applicable  to  all  servants.  In  twelve 
others  the  laws  apply  only  to  railroad  employ- 
ees; in  five,  to  railroad  and  mine  workers,  and 
in  one  to  mine  workers  only.  In  addition  to 
these,  two  commonwealths  have  made  laws 
applicable  only  to  injuries  befalling  employ- 
ees of  corporations ;  one,  laws  applicable  only 
to  factory  workers ;  three,  laws  applicable  only 

*  Meacham,  in  Illinois  Law  Review,  supra. 


56  ACCIDENT  COMPENSATION 

to  factory  and  railroad  employees;  and  an- 
other, laws  applicable  to  all  "industrial  em- 
ployees." In  nine  of  the  states  having  laws 
that  apply  to  all  servants,  the  particular  hazard 
of  employment  on  railroads  and  in  mines  has 
been  recognized  by  the  inclusion  of  provisions 
that  bear  specifically  on  cases  in  which  men  are 
injured  in  one  or  both  of  these  industries. 

In  but  nine  states  does  legislation  specifi- 
cally hold  all  employers  responsible  for  defects 
in  ways,  works,  machinery,  or  plant,  that  may 
lead  to  the  injury  of  employees.  In  five  others 
such  legislation  applies  to  railroad  companies 
only.  Nineteen  states  make  provisions  for 
stated  safety  devices  and  precautions  in  fac- 
tories, on  railroads,  and  in  mines,  and  stipu- 
late that  employers  be  held  responsible  for 
injuries  arising  from  non-compliance. 

In  a  majority  of  the  states  the  law,  in  so  far 
as  it  is  applicable,  makes  the  employer  specifi- 
cally liable  for  negligence  in  superintendence, 
—  that  is,  the  negligence  of  an  employee  hav- 
ing powers  of  the  master  delegated  to  him. 
In  but  four  states  is  the  fellow-servant  doc- 
trine abolished  for  employees  in  all  industries. 
In  thirteen  it  is  abolished  for  railroad  employ- 
ees only,  in  three  for  both  railroad  and  mining 
employees,  and  in  one,  for  mine  workers  only. 
In  ten  states  other  than  these  the  doctrine 
is  greatly  modified.   In  all,  thirty-two  states 


LAW  OF  EMPLOYERS'  LIABILITY      57 

have  enactments  of  some  character  relating 
to  this  doctrine. 

A  means  much  used  at  one  time  to  evade 
obligations  imposed  by  employers'  liability 
laws  was  to  require  workers,  as  a  condition  of 
employment,  to  sign  papers  releasing  the  em- 
ployer from  any  claims  that  might  be  made 
under  the  provision  of  such  laws.  This  is 
known  as  "contracting  out.'*  Twenty-one 
states  expressly  provide  that,  in  so  far  as  their 
liability  laws  apply,  attempts  to  "contract 
out"  shall  be  void.  Some  of  the  states  even 
attach  penalties  to  the  mere  act  of  making 
such  an  attempt.  In  four  other  states  such 
contracts  are  barred  between  railroads  and 
their  employees,  and  one  state  makes  the 
same  prohibition  in  relation  to  the  mining 
industry. 

As  is  seen  by  the  above  analysis  of  statu- 
tory provisions,  the  law  is  far  from  uniform, 
and,  as  a  consequence,  both  the  liability  of 
employers  and  the  legal  rights  of  injured 
workers  vary  greatly.  Table  XV  shows  the 
relative  liability  of  employers  in  the  different 
states  as  determined  from  the  experience  of 
the  employers'  liability  insurance  companies 
in  the  settlement  of  injury  claims.^  The  fig- 
ures, it  should  be  observed,  have  only  a  rela- 
tive significance. 

^  See  hereafter,  chapter  v. 


58 


ACCIDENT  COMPENSATION 


TABLE  XV 


RELATIVE  COSTS  DUE  TO  LOSSES   IN   DIFFERENT   STATES    IMPOSED  BT 
employers'  LIABILITY  LAWS  ' 

{Used  by  the  companies  in  determining  rates) 


Alabama 1.20 

Arizona 2.00 

Arkansas 1.33 

California 1.00 

Colorado 2.00 

Connecticut 60 

Delaware 1 .33 

Dist.  Col 90 

Florida 60 

Georgia 1.20 

Idaho 2.00 

Illinois 1.33 

Indiana 1.20 

Indian  Ter 2.00 

Iowa 1.33 

Kansas 2.00 

Kentucky 1.33 

Louisiana 70 

Maine 1.00 

Maryland 70 

Massachusetts 1.00 

Michigan 60 

Minnesota 1.33 

Mississippi 80 

Missouri 1.33 


Montana 2.00 

Nebraska 1.33 

New  Hampshire 1.00 

New  Jersey 70 

New  Mexico 2.00 

Nevada 2.00 

New  York 1.00 

North  Carolina 1.20 

North  Dakota 2.00 

Ohio 80 

Oklahoma 2.00 

Oregon 80 

Pennsylvania 1.00 

Rhode  Island 1.33 

South  Carolina 1.20 

South  Dakota 2.00 

Tennessee 2.00 

Texas 2.00 

Utah 2.00 

Vermont 1.00 

Virginia 70 

Washington 2.00 

West  Virginia 70 

Wisconsin 1.33 

Wyoming 2.00 


Although  the  common  law  affecting  the  lia- 
bility of  the  employer  for  accidents  befalling 
his  men  has,  as  thus  shown,  been  greatly  modi- 
fied by  statutory  enactments  in  many  states, 
the  judge-made  laws  concerning  negligence,  as- 
sumed risks,  and  the  fellow  servant  are  still 
dominant.   If  the  social  and  industrial  con- 

^  From  Industrial  Insurance  in  [the  United  States,  p.  187.  Inas- 
much as  these  payments  constitute  costs  of  production,  it  is  readily 
seen  that,  from  the  standpoint  of  industrial  competition,  a  decided 
premium  is  placed  upon  delinquency  in  liability  legislation. 


LAW  OF  EMPLOYERS'  LIABILITY       59 

ditions  under  which  these  principles  were  first 
promulgated  were  not  greatly  different  from 
the  conditions  under  which  productive  enter- 
prises are  conducted  at  the  present  time,  the 
need  for  studying  the  problem  of  compensa- 
tion for  accidents  would  be  less  apparent.  But 
the  tremendous  expansion  of  systems  of  pro- 
duction that  has  marked  the  development  of 
modern  industrialism  has  had,  in  so  far  as 
it  relates  to  the  subject  of  this  essay,  two 
important  results,  —  increased  danger  to  the 
worker,  and  lessened  personal  contact  with 
fellow  workers  and  with  employers.  Modern 
creative  processes  have  brought  multitudes  of 
workers  into  direct  contact  with  ponderous 
implements  of  production  that  render  their 
occupations  extremely  dangerous,  and  have 
also  made  expedient,  if  not  necessary,  com- 
plicated relations  between  owners,  managers, 
superintendents,  foremen,  and  employees.  In 
these  modern  industrial  organizations  the 
common  worker  may  be  far  removed  from 
fellow  employees  and  employer,  and  thus  his 
individual  importance  and  responsibility  is 
often  reduced  to  a  minimum. 

Of  this  extraordinary  change  in  a  society 
which  it  is  intended  to  serve,  the  law  of  em- 
ployers' liability  has  failed  to  take  cognizance. 
In  its  absurd  respect  for  precedent,  the  law 
assumes  the  conditions  of  a  bygone  age.  The 


60  ACCIDENT  COMPENSATION 

burden  of  injury,  says  the  law  of  negligence, 
must  be  borne  by  the  individual  responsible 
for  it;  yet  the  majority  of  accidents  to-day  are 
chargeable  to  conditions,  not  to  men.  The 
danger  of  injury,  says  the  doctrine  of  assumed 
risks,  may  be  better  known  and  provided 
against  by  the  employee  than  by  the  employer; 
but,  in  a  time  of  supervision  by  technical  men 
and  of  untrained  labor,  the  reverse  is  more 
often  true.  An  habitually  negligent  man,  says 
the  fellow-servant  doctrine,  may  be  detected 
by  his  fellow  workers  more  readily  than  by  his 
employer,  and,  as  a  consequence,  they  are  bet- 
ter situated  to  guard  against  his  careless  acts. 
But  this  too  is  a  doctrine  of  the  past.  In  an 
age  when  the  negligent  fellow  servant  may  be 
a  telegraph  operator  whom  the  railroad  train- 
man never  saw,  or  a  hoisting  engineer  who 
speaks  a  different  language  from  that  of  the 
foreign-born  miner  whose  life  depends  upon 
his  reliability,  the  utter  absurdity  of  this  con- 
tention is  made  fully  evident. 

More  than  this,  there  are  no  outgrown  prin- 
ciples, such  as  the  doctrine  of  assumed  risk 
and  the  fellow-servant  doctrine,  that  may  be 
brought  to  the  aid  of  the  injured  worker.  The 
employer  alone  may  profit  from  the  applica- 
tion of  archaic  legal  dogmas,  for  the  common 
law  of  employers'  liability  was  apparently  de- 
veloped under  a  philosophy  of   social    expe- 


LAW  OF  EMPLOYERS'  LLYBILITY       61 

diency  that  protected  the  man  of  property 
against  the  claims  of  the  irresponsible  plebeian. 
Whatever  may  have  been  the  defense  of  such 
a  policy  at  a  time  when  capital  was  limited 
and  the  conditions  of  industry  more  simple, 
its  projection  into  the  life  of  the  present  is 
indefensible. 

Even  if  we  grant  the  comfortable  fiction 
that  the  law  arbitrates  impartially  in  liability 
cases,  the  great  difference  in  the  ease  with 
which  employer  and  employee  may  follow  its 
intricate  processes  has  seriously  handicapped 
the  latter.  The  principal  obstacles  are  the  un- 
certainty, the  expense,  and  the  delay  of  liti- 
gation, —  all  of  which  fall  most  heavily  upon 
the  plaintiff.  A  large  employer  may,  in  the 
knowledge  that  his  average  of  losses  is  low, 
accept  serenely  an  adverse  decision.  There  is 
no  law  of  averages  to  console  the  injured  em- 
ployee or  his  dependents.  The  loss  of  his  suit 
at  law,  like  the  loss  of  his  earning  power,  is  a 
blow  that  falls  but  once.  The  employee  is 
usually  obliged  to  engage  his  attorney  upon 
the  basis  of  a  contingent  fee,  and  therefore 
secures  less  expert  service  than  does  the  em- 
ployer in  return  for  the  sum  expended.  Court 
fees  are  often  difficult  for  the  plaintiff  to  pay, 
and,  as  each  step  in  the  long  proceedings  calls 
for  additional  expenditure,  the  temptation 
grows  greater  and  greater  to  settle  for  a  small 


62  ACCIDENT  COMPENSATION 

sum,  or  to  abandon  the  unequal  contest.  The 
slow  processes  of  the  law  work  no  hardship 
upon  the  defendant  employer,  but,  for  the  in- 
jured worker  or  his  dependents,  it  is  often  a 
starving-out  process,  effective  in  forcing  an  in- 
equitable settlement.  The  law,  in  short,  has 
so  many  technicalities,  its  defenses  for  the 
employer  are  so  strong,  and  its  processes  are 
so  slow,  that  worthy  claimants  with  little 
means  have  but  a  meagre  chance  of  just  con- 
sideration. 

The  common  law  of  liability,  an  outgrowth 
of  the  past,  is  no  longer  in  harmony  with  the 
social  organism  it  aims  to  serve,  while  statu- 
tory modifications  in  many  states  have  been 
inadequate  to  remedy  its  deficiencies.  Says 
Elihu  Root,  "The  present  law  is  foolish,  waste- 
ful, ineffective,  and  barbarous."^  Its  absurd 
protection  of  property  rights  at  the  expense 
of  human  interests  must  lead,  sooner  or  later, 
to  its  radical  modification,  if  not  to  its  com- 
plete overthrow. 

*  Address  before  the  National  Civic  Federation,  November,  1909. 
Quoted  in  The  Survey,  vol.  23,  p.  336. 


CHAPTER  V 

employers'  liability  insurance 

While  the  law  of  employers'  liability  is  so 
framed  and  so  interpreted  that  it  seldom  ex- 
acts adequate  compensation  for  injured  work- 
ers, yet  it  leaves  room  for  such  expensive  liti- 
gation, and  occasional  heavy  damages,  that 
many  employers  have  been  constrained  to 
seek  the  protection  of  insurance  against  lia- 
bility costs.  Of  all  influences  affecting  the 
operation  of  employers'  liability  laws  in  the 
United  States,  probably  none  is  of  greater 
consequence  than  the  policies  and  methods 
of  the  casualty  insurance  companies  in  their 
conduct  of  the  employers'  liability  business. 

In  an  advertising  leaflet,  one  of  the  largest 
casualty  insurance  companies  doing  this  kind 
of  business  in  the  United  States  says:  — 

A  trifling  injury  to  a  workman  .  .  .  may  involve 
the  employer  in  a  lawsuit  of  a  very  troublesome  nature, 
or  necessitate  his  compromising  the  matter  at  a  serious 
cost.  .  .  .  With  a  view  to  relieving  employers  of  such 
liability  .  .  .  [the  insurance  company]  issues  policies 
indemnifying  employers  against  any  compensation  or 
damages  which  they  may  be  required  to  pay  as  the 
result  of  legal  proceedings,  or  which,  with  the  concur- 


64  ACCIDENT  COMPENSATION 

rence  of  the  [insurance]  corporation,  the  employer  may 
agree  to  pay,  in  respect  to  accident  to  workmen.  This 
system  of  insurance  must  afford  an  inestimable  relief 
to  the  heads  of  large  factories  and  other  employers  of 
labor,  in  that  they  are  relieved  of  all  the  trouble  and 
anxiety  attaching  to  accidents  to  their  employees,  and 
are  able  to  determine  exactly  their  yearly  expenses  in 
respect  to  such  casualties. 

This  form  of  insurance  against  the  dam- 
age claims  of  injured  workmen  is  written  in 
policies  of  varying  forms  to  meet  the  needs  of 
contractors,  manufacturers,  landlords,  and  the 
owners  of  teams,  trucks,  elevators,  theatres, 
and  vessels.  The  business  has  been  developed 
in  the  United  States  practically  within  the 
past  twenty  years,  and  its  rapid  growth  has 
been  a  natural  outcome  of  the  increasing 
stringency  of  liability  laws  and  judgments 
based  upon  them,  and  of  the  tendency  of  in- 
jured employees,  stimulated  by  "ambulance- 
chasing"  attorneys,  to  press  ruinous  damage 
claims  against  employers.  The  policies  pro- 
vide that  the  insurance  company  shall,  in  re- 
turn for  a  premium  based  upon  the  amount  of 
the  annual  pay-roll,  and  varying  according  to 
the  nature  of  the  business  and  the  condition 
of  the  plant,  insure  the  holder  against  ex- 
penses arising  from  legal  liability  for  injuries 
befalling  his  employees.  They  provide  for  the 
payment  of  the  full  cost  of  litigation,  as  well  as 


EMPLOYERS'  LIABILITY  INSURANCE     65 

for  the  actual  sums  paid  to  injured  men.  The 
expense  of  immediate  surgical  relief  is  usually 
covered,  and,  for  an  increased  premium,  the 
full  expense  of  medical  attendance  as  long  as 
needed  may  be  included.  A  limit  is  set  to  the 
liability  of  the  company  because  of  any  one 
accident,  and  a  second,  smaller  sum  is  stated 
as  the  maximum  amount  payable  on  account 
of  the  injury  of  any  one  person.  Premiums 
vary  also  according  to  these  limits. ^  The  in- 
sured is  obliged  to  make  full  reports  to  the 
insurance  company  of  all  accidents,  to  give 
notice  of  all  claims  entered  by  injured  employ- 
ees, and  to  forward  promptly  every  summons 
or  other  legal  paper  as  soon  as  it  is  served. 
i(.  In  this  way  the  insurance  company  be- 
comes, in  effect,  the  defendant  against  all 
damage  claims.  It  is  an  attorney  as  well  as  an 
insurance  company.  Whether  the  case  is  set- 
tled by  agreement  or  is  fought  through  the 
courts,  the  employer  is  a  dummy  defendant. 
Thus  employers'  liability  insurance  shifts  the 
source  of  legal  compensation  for  injuries  from 
the  employer  to  the  insurance  corporation. 
It  effects  a  distortion  of  natural  relationships 
that  often  works  a  hardship  to  the  injured 
workingman  or  his  heirs,  for  with  most  em- 

^  Independently  of  these  maximum  limits,  however,  the  insurance 
company  pays  all  expenses  resulting  from  claims,  as  stated  above, 
including  the  cost  of  court  proceedings. 


66  ACCIDENT  COMPENSATION 

ployers  personal  considerations  naturally  tend 
to  loosen  the  purse  strings.  Sentiments  of 
humanity,  and  a  desire  to  placate  criticism 
both  on  the  part  of  the  employees  and  of  the 
public,  induce  generous  action  towards  the  in- 
jured workman.  The  liability  insurance  com- 
pany has  none  of  these  interests;  it  is  a  "soul- 
less corporation"  in  the  strict  meaning  of  the 
term.  Its  service  to  the  world  of  business  is 
to  reduce  liability  obligations  to  the  barest 
requirements  of  the  law;  the  personal  element 
is  entirely  removed,  and  the  injured  workman 
faces  the  calculating  claim  agents  and  the  re- 
sourceful attorneys  of  a  distant  corporation 
of  which  he  may  never  have  heard  before. 

But  the  objection  that  the  adjustment  of 
claims  is  based  upon  wholly  impersonal  con- 
siderations is  not  of  itself  sufficient  to  con- 
demn employers'  liability  insurance.  This  is 
fundamentally  sound  in  principle,  for,  since 
the  extent  to  which  human  sympathy  will 
benefit  the  injured  worker  cannot  be  foretold, 
and  the  employee  may  not  always  know  what 
his  treatment  is  likely  to  be  before  it  is  too 
late  for  precaution,  the  removal  of  the  per- 
sonal element  may  be  made  an  exceedingly 
desirable  feature  of  any  plan  for  compensat- 
ing industrial  injuries.  The  substitution  of  a 
definite  and  uniform  obligation  for  the  loose 
method  of  determination  often  followed  by 


EMPLOYERS'  LIABILITY  INSURANCE     67 

employers  would  be  expedient  in  any  system 
of  handling  this  troublesome  class  of  indus- 
trial costs. 

So  far,  very  well.  But  the  liability  company 
makes  only  a  slight  contribution  to  such  an 
end.  It  removes  the  personal  element;  but  for 
what.^  The  policy  makes  no  promise  of  com- 
pensation for  the  workman ;  it  merely  promises 
the  employer  immunity  from  such  charges. 
Whatever  considerations  of  humanity  or  of 
selfish  interest  may  have  influenced  the  em- 
ployer are  replaced  by  the  calculating  motives 
of  an  insurance  corporation. 

During  the  ten-year  period  ending  with 
1908,  nine  of  the  leading  liability  companies, 
as  reported  to  the  Massachusetts  Insurance 
Department  under  the  act  of  1905,  paid  $44,- 
921,435  to  the  victims  of  1,952,731  industrial 
accidents,  —  an  average  of  $23  each.^  Eight 
of  the  largest  companies  during  the  ten  years 
ending  with  1907  disposed  of  1,619,609  cases 
at  an  average  cost  of  $21.58  each.  Dur- 
ing the  second  half  of  the  period,  they  paid 

^  The  distinction  should  be  kept  in  mind  between  "h'ability  insur- 
ance"  and  "employers'  liability  insurance."  The  former  includes 
the  latter,  and,  in  addition,  several  classes  of  public  liability  and 
professional  liability  insurance.  In  the  case  of  much  of  the  statistical 
data  set  forth  in  this  chapter,  no  separation  of  figures  can  be  made, 
but  it  is  believed  that  the  facts  concerning  liability  insurance  would 
hold  true  of  employers'  liability  insurance  if  such  a  separation  could 
be  made. 


as  ACCIDENT  COMPENSATION 

<• 

out  on  933,767  cases  an  average  of   $17.29 
each. 

Of  these  1,619,609  victims  of  accidents,  33,- 
881,  or  2.1  per  cent,  had  the  hardihood  to  seek 
legal  satisfaction  for  their  injuries.  Their  suits 
were  disposed  of  at  an  average  cost  of  $489.83 
each.  During  the  second  half  of  the  decade, 
14,449  cases  cost  an  average  of  $420.11  each.* 
While  it  is  impossible  to  determine  from  these 
figures  what  sum,  after  paying  attorneys'  fees 
and  other  expenses,  actually  reached  accident 
victims,  it  is  evident  that  the  voluntary  com- 
pensations paid  by  insurance  companies  are 
mere  pittances,  and  that  payments  enforced 
by  lawsuits  average  less  than  five  hundred 
dollars. 

It  might  be  expected  that  the  transfer  of 
liability  obligations  from  employers  to  large 
and  powerful  insurance  corporations  would 
tend  to  lessen  the  delay  incident  to  the  settle- 
ment of  suits.  But  this  does  not  prove  to  be 
the  case.  As  reported  in  the  "  Insurance  Year 
Book"  for  1909,  insurance  companies  doing 
business  in  the  United  States  had  12,502  suits 
outstanding  on  December  31,  1908.  Of  these 
suits,  1927,  or  15.4  per  cent,  were  for  injuries 
less  than  one  year  old;  4264,  or  34.1  per  cent, 

*  Inasmuch  as  these  figures  form  a  part  of  the  total  upon  which 
averages  are  based  in  the  preceding  paragraph,  it  is  e\'ident  that 
average  compensations  to  the  98  per  cent  who  did  not  bring  suit 
were  much  smaller  than  there  indicated. 


EMPLOYERS'  LIABILITY  INSURANCE     69 

for  injuries  more  than  one  and  less  than  two 
years  old;  5449,  or  43.5  per  cent,  for  injuries 
between  two  and  five  years  old;  808,  or  6.4  per 
cent,  for  injuries  between  five  and  ten  years 
old;  and  54,  or  0.5  per  cent,  were  for  injuries 
over  ten  years  old.  Although  corresponding 
figures  are  not  available  concerning  suits 
against  employers  who  were  not  insured,  the 
showing  of  the  liability  companies  is  far  from 
favorable,  and  the  virtue  of  prompt  settle- 
ment of  injury  claims  cannot  be  ascribed  to 
their  business. 

In  the  wide  discussion  during  recent  years 
upon  the  need  of  a  better  system  of  industrial 
accident  compensation,  much  has  been  spoken 
and  written  about  the  economic  character  of 
the  employers'  liability  insurance  business. 
"In  the  ten  years  ending  with  1907,"  says 
a  recent  labor  office  report,^  "$82,732,705 
were  collected  as  premiums  by  the  eight  lar- 
gest liability  companies  in  the  United  States, 
and  $34,951,103  (or  42  per  cent  of  the  pre- 
miums) were  paid  out  in  losses  to  1,619,607 
injured  workingmen  —  an  average  of  $21.57 
to  each  person.'*  This  conclusion  is  borne  out 
by  the  comparisons  made  in  Table  XVI  follow- 
ing, and  wide  criticism  of  the  social  economy 
of  this  means  of  covering  accident  costs  has 

^  Bulletin  No.  1,  Minnesota  Bureau  oj  Labor,  Industries,  and  Com- 
merce, p.  47. 


70 


ACCIDENT  COMPENSATION 


been  based  upon  similar  statistical  data.  But 
in  order  to  do  full  justice  to  the  liability  com- 
panies, consideration  must  be  given  to  the 
corresponding  iSgures  for  other  lines  of  insur- 
ance presented  in  Table  XVII,  on  page  72. 

In  Table  XVI  is  presented  the  liability  ex- 
perience of  all  insurance  companies  doing  busi- 

TABLE  XVI 

LIABILITY   EXPERIENCE   OF   INSURANCE   COMPANIES  ' 


Year  or  years 

Premium3  received 

Losses  paid 

Percentage  losses 

paid  of  premiums 

received 

1904 
1905 
1906 
1907 
1908 

$14,807,515 
16,377,613 
19,358,447 
22,759,060 
22,711,547 

$6,123,770 

7,202,565 

8,902,951 

10,999,586 

11,670,222 

41.3 
44.0 
46.0 
48.3 
61.4 

Five  years  ending 
with  1908 

$96,014,182 

$44,899,094 

46.7 

Fifteen  years  end- 
ing witii  1908 

$164,888,133 

$75,172,257 

45.6 

ness  in  the  United  States,  for  the  fifteen  years 
ending  with  1908.  During  this  period  the 
total  losses  paid  were  45.6  per  cent  of  the 
total  premiums  collected,  and  during  the  five- 
year  period  ending  with  1908  the  losses  were 
46.7  per  cent  of  the  premiums  —  the  per- 
centage being  but  slightly  higher  than  for  the 
fifteen-year  period. 

^  Compiled  from  the  Insurance  Year  Book  for  1909. 


EMPLOYERS'  LIABILITY  INSURANCE     71 

Yet  it  must  not  be  assumed  that  the  busi- 
ness is  unduly  profitable.  *'It  is  claimed  by 
friends  of  the  companies,"  says  Professor  Hen- 
derson, "that  the  rate  of  commission  alone  for 
securing  business  will  average  between  twenty- 
five  and  thirty  per  cent;  .  .  .  that  [all]  ex- 
penses average  about  fifty  per  cent  of  the 
premiums,  and  that  the  margin  of  profit  left 
is  about  ten  per  cent  of  the  receipts.  "^  This 
conclusion  approximates  that  drawn  from  the 
foregoing  figures.  Expert  service  is  required 
on  the  part  of  officers,  managers,  and  agents; 
office  expenses  are  exceedingly  heavy;  and  the 
companies  pay  enormous  sums  in  the  defense 
of  injury  suits  against  policy-holders.  The 
full  statistics  for  1908  of  twenty-seven  lead- 
ing casualty  companies  are  given  in  the  "In- 
surance Year  Book"  for  1909.  These  com- 
panies collected  during  the  year  $47,098,549 
in  premiums.  Of  this  sum  45.7  per  cent  was 
paid  for  losses,  50.1  per  cent  for  expenses,  and 
but  4.2  per  cent  remained  as  the  net  under- 
writing profit  on  the  business.  During  the 
same  year,  173  companies  doing  practically 
all  of  the  surety  and  casualty  insurance  busi- 
ness in  the  United  States,  and  having  a  total 
capitalization  of  $64,872,268,  collected  pre- 
miums to  the  amount  of  $73,332,978.  Of  this 
latter  sum,  41.4  per  cent  was  paid  out  for 

'  Industrial  Insurance  in  the  United  States,  p.  136. 


72 


ACCIDENT  COMPENSATION 


losses,  and  52.4  per  cent  for  expenses,  in- 
cluding taxes.  The  stockholders'  dividends, 
$5,274,399,  were  8.1  per  cent  of  the  capital. 
This,  it  should  be  observed,  is  the  experi- 
ence of  casualty  companies.  Figures  for  em- 
ployers' liability  insurance  cannot  be  secured 
separately.  Yet  similar  conditions,  as  may 
be  seen  by  Table  XVII,  obtain  in  all  classes 
of  miscellaneous  insurance  written  by  these 
companies. 

Table  XVII  shows  for  the  five  years  ending 
with  1908  the  ratio  of  losses  paid  to  premiums 


TABLE  XVII 

PREMIUMS  RECEIVED  AND  LOSSES  PAID  IN  THE  UNITED  STATES  IN 
ALL  LINES  OF  INSURANCE,  EXCEPT  LIFE  INSURANCE,  1904  TO 
1908  INCLUSIVE' 


Percentage  losses 

Line  of  insurance 

Premiums  received 

Losses  paid 

paid  of  premiums 
received 

Accident 

$84,709,741 

$36,109,631 

42.6 

Burglary  and  theft 

9,772,863 

,  3,345,921 

34.2 

Credit 

9,817,504 

5,157,962 

62.5 

Fidelity  and  surety 

50,876,284 

17,000.218 

33.4 

Fire  and  marine 

1,404.619,611 

871,939,911 

69.5» 

Health 

16,684,961 

6,643.160 

39.8 

Liability 

96,014,182 

44.899,094 

46.7 

Plate  glass 

13,394,737 

5.110,378 

38.2 

Steam  boiler 

10,066,815 

977,174 

9.7 

Sprinkler 

649,695 

165.305 

25.4 

Total 

$1,756,606,393 

$991,348,754 

56.4* 

*  Compiled  from  the  Insurance  Year  Book  for  1909. 

*  The  San  Francisco  fire  of  1906  raises  this  percentage  materially. 
The  normal  proportion  would  be  about  fifty  per  cent. 


EMPLOYERS'  LIABILITY  INSURANCE      73 

received  in  all  lines  of  underwriting  except 
life  insurance.  Of  liability  insurance  premiums, 
46.7  per  cent,  as  has  been  stated,  were  paid 
out  in  losses  during  this  time.  In  comparison 
with  this,  fire,  marine,  and  credit  insurance 
were  the  only  classes  in  which  more  than  one- 
half  of  premiums  were  paid  out  on  policies. 
Only  56.4  per  cent  of  funds  paid  out  for  all 
classes  of  insurance  ever  returned  to  policy- 
holders, and  if  allowance  is  made  for  the  ab- 
normal condition  brought  about  in  1906  by 
the  catastrophe  in  San  Francisco,  fire  losses 
would  be  reduced  to  about  fifty  per  cent  of 
premiums,  and  the  average  percentage  of 
payments  for  losses  in  all  classes  would  be 
approximately  the  same. 

In  the  light  of  these  statistics  it  seems  ap- 
parent that  the  liability  business  pays  only  a 
moderate  underwriting  profit,  and  that  even 
the  heaVy  expenses  of  conducting  it  are  not 
disproportionate  to  those  incurred  in  carrying 
on  other  lines  of  insurance  business.  Even  in 
the  case  of  the  mutual  accident  associations, 
expenses  are  very  high.  The  experience  in 
1908  of  fifty-eight  of  these  companies,  carry- 
ing a  billion  and  a  quarter  of  insurance  for  a 
half-million  members,  is  given  in  the  "Insur- 
ance Year  Book"  for  1909.  These  associa- 
tions collected  $3,590,507  from  members  in 
the  course  of  the  year,  and  of  this  paid  back 


74  ACCIDENT  COMPENSATION 

but  58.3  per  cent  on  losses,  while  expenses 
were  41.1  per  cent. 

But  still  these  defenses  of  the  liability  com- 
pany do  nothing  to  relieve  the  victims  of  in- 
dustrial accidents.  A  very  large  proportion 
of  this  fifty  per  cent  and  more  of  liability 
premiums  that  is  now  necessary  for  the  pay- 
ment of  a  large  number  of  high  salaries,  liberal 
commissions,  generous  attorneys'  fees,  and 
heavy  office  expenses,  should  be  turned  to 
the  account  of  injured  workmen  and  their 
dependents.  All  insurance,  it  appears,  costs 
more  than  losses  warrant,  but  liability  insur- 
ance, while  it  suffers  little  from  comparison, 
constitutes  an  exaggerated  form  of  social  ex- 
travagance, for  it  diverts  large  sums  of  money 
which  ought  to  be  used  for  the  benefit  of  pecu- 
liarly unfortunate  individuals. 

Employers'  liability  insurance,  under  exist- 
ing law,  is  a  commercial  necessity,  for  with- 
out it  many  employers  would  be  dangerously 
insecure  in  the  conduct  of  their  business 
enterprises.  Yet  it  is  a  gross  transgressor  of 
social  economy.  It  stifles  the  brotherly  love 
that  naturally  goes  out  from  an  employer  to 
an  injured  workman,  and  forces  the  victim  of 
the  accident  to  seek  compensation  from  a  dis- 
tant corporation  of  which  the  earnings  and 
even  the  solvency  depend  on  restricted  loss 


EMPLOYERS'  LIABILITY  INSURANCE     75 

payments.  The  voluntary  compensations 
paid  by  these  insurance  companies  are  mere 
pittances,  and  awards  obtained  from  them  at 
the  expense  of  litigation  are  anything  but 
liberal;  the  liability  business,  in  common 
with  other  classes  of  insurance,  entails  an 
operating  expense  of  over  one  half  of  the  pre- 
miums. 

It  is  doubtful  if  these  abuses  could,  under 
any  possible  system  of  liability  law,  be  wholly 
eliminated;  yet  revision  of  the  law  in  the  di- 
rection of  reducing  the  speculative  value  of 
work  injuries  that  arises  out  of  the  tempting, 
ever  present  possibility  of  a  large  award  for 
damages,  must  react  beneficially  upon  the 
social  value  of  this  form  of  insurance. 


CHAPTER  VI 

CONCLUSION   AND    SUGGESTED   REMEDIES 

The  preceding  chapters  have  set  forth  the 
losses  due  to  industrial  accidents  in  the  United 
States,  together  with  the  efforts  being  made, 
both  by  legal  and  by  private  agencies,  to 
effect  an  equitable  distribution  of  the  tre- 
mendous charge  upon  the  working  classes. 

The  blood  tax  of  American  production  is 
larger  than  a  humane  public  conscience  may 
comfortably  realize.  On  the  railroads,  in  the 
coal-mines,  in  factories,  and  on  construction 
work,  life  and  limb  is  a  constituent  part  of  the 
cost  of  the  economic  goods  produced.  Human 
invention  has  progressed  so  far  beyond  hu- 
man capacity  for  endurance,  that  a  creature 
of  mere  flesh  and  blood  has  a  small  chance 
among  the  ponderous  mechanical  devices  and 
dangerous  situations  that  surround  the  life  of 
the  modern  industrial  worker.  ^  Says  the  New 
York  State  Employers'  Liability  Commission: 

A  study  of  the  official  accident  statistics  of  this 
state  (contained  in  the  reports  of  the  Commissioner  of 
Labor)  shows  beyond  peradventure  that  the  hazardous 

^  In  a  large  number  of  industrial  accident  cases  studied  under  the 
direction  of  the  New  York  Commission  (page  92  of  report  quoted 
below),  it  was  found  that  in  87.5  per  cent,  the  injury  was  due  solely 
to  modern  conditions. 


CONCLUSION  — SUGGESTED  REMEDIES   77 

employments  of  the  state  annually  exact  their  toll  of 
life  and  limb  of  the  workers  with  astounding  certainty 
—  that  the  construction  of  iron  and  steel  bridges  and 
buildings  has  a  definite  cost  in  the  lives  of  the  workers, 
that  each  crane  or  derrick  will,  once  in  so  many  thou- 
sand operations,  crush  and  mangle  a  worker;  that  there 
is  a  mathematical  ratio  of  industrial  accidents  in  the 
hazardous  trades,  depending  upon  the  speed  at  which 
industry  moves  and  upon  the  number  of  workmen,  as 
remorseless  and  as  certain  as  the  death  rate  on  which 
the  tables  for  life  insurance  are  based.^ 

In  this  modern  method  of  human  slaughter, 
America  seems  to  lead.  We  produce  one  third 
more  coal  per  mine-worker  than  does  Europe, 
and,  in  doing  so,  kill  and  cripple  three  times 
as  many  men.  There  are  other  comparisons 
with  European  conditions  indicating  no  less 
strongly  that  our  industries  consume  more 
than  is  necessary  of  human  life  and  limb, 
but  the  possibility  of  reducing  the  grewsome 
proportion  is  a  subject,  in  the  main,  for  tech- 
nical study.  Efforts  to  do  so  are  being  made 
perhaps  as  never  before,  by  industrial  con- 
cerns, by  insurance  corporations,  and  by  gov- 
ernmental regulation,^  but,   apply  whatever 

*  Report  to  the  Legislature  of  the  State  of  New  York  by  the  Commis- 
sion .  .  .  to  Inquire  into  the  Question  of  Employers'  Liability,  First 
Report,  March,  1910,  p.  5. 

2  One  of  the  largest  American  manufacturing  concerns,  of  which 
the  identity  is  held  in  confidence,  states  that  43  per  cent  of  its  em- 
ployees, in  the  year  1900,  were  injured  at  work  so  severely  that 
time  was  lost  beyond  the  day  of  the  accident.  This  concern  has  since 
given  close  attention  to  the  organization  and  conduct  of  a  vigorous 


78  ACCIDENT  COMPENSATION 

safeguards  we  will,  a  certain  number  of  acci- 
dents will  be  sure  to  happen.  Many  of  them 
are  chargeable  to  the  rush  and  hurry  inci- 
dent to  commercial  accomplishment  in  a  new 
country;  and  the  increasing  attention  to  safe 
equipment  and  cautious  operation,  that  will 
inevitably  follow  more  settled  conditions,  will 
partially  solve  the  problem  of  accident  com- 
pensation by  reducing  the  number  of  casu- 
alties. But  workingmen  who  face  constant 
danger  day  after  day,  month  after  month,  and 
year  after  year,  are  certain  to  grow  careless 
of  it.  The  same  psychological  weakness,  if  it 
may  be  so  called,  that  makes  the  good  soldier, 
also  makes  the  good  steel  worker,  the  daring 
**  sand-hog,"  and  the  strong-nerved  engineer. 
More  than  this,  there  are  mechanical  imper- 
fections which  no  care  can  eliminate,  and 
natural  phenomena  which  no  wisdom  can  fore- 
campaign  for  safety  in  its  works,  with  the  hopeful  result  that  the  pro- 
portion of  its  men  thus  injured  has  been  reduced  from  43  per  cent  in 
1900  to  19  per  cent  in  1909.  Another  large  employer,  of  which  the 
experience  is  scarcely  less  significant  than  that  of  the  first  mentioned, 
has  found  that,  of  all  accidents  resulting  in  the  loss  of  as  much  aa 
twenty-five  days'  time,  that  occurred  in  its  plant  during  a  seven-year 
period,  90  per  cent  were  due  to  preventable  causes.  This  concern 
has  since  installed  mechanical  safety  devices  and  inaugurated  rules 
and  precautionary  methods  that  should,  it  asserts,  prevent  the  repe- 
tition of  any  of  these  accidents. 

It  is  asserted  with  apparent  good  reason  by  many  students  of  the 
problem  of  accident  prevention  that  over  one  half  of  all  industrial  acci- 
dents may  be  eliminated  by  proper  attention  to  guards  for  machinery, 
rules  for  operation,  and  the  inspection  of  equipment.  These  preven- 
tive means  must  be  held  in  view  as  measures  of  the  first  importance. 


CONCLUSION  — SUGGESTED  REMEDIES  79 

tell,  —  all  of  which  tend  to  make  inevitable 
the  loss  of  many  lives  by  accident.  It  is,  seem- 
ingly, a  necessary  cost  of  production. 

Who  bears  the  cost.^^  To  kill  a  man,  to  tear 
off  an  arm  or  a  leg,  or  to  destroy  an  eye  is  to 
cause,  wholly  apart  from  the  humane  consid- 
eration, as  concrete  a  financial  loss  as  to  re- 
duce a  locomotive  to  scrap  iron  or  a  factory 
building  to  ashes.  Is  this  loss  met  by  the  pro- 
fits of  production,  or  does  it  fall  upon  individ- 
ual workers  .^^ 

There  are  many  private  agencies  for  the 
distribution  of  accident  costs,  such  as  relief 
departments,  wage  payments  during  disabil- 
ity, mutual  organizations  of  employees,  and 
accident  insurance,  both  individual  and  col- 
lective, but  each  of  them  is  open  to  serious  ob- 
jection, and  they  are  inadequate,  even  when 
considered  collectively,  to  meet  the  demands 
of  the  situation.  Employers  are  justly  un- 
willing to  insure  their  men  while  the  additional 
burden  of  liability  costs  is  constantly  hanging 
over  them,  and  workingmen  either  cannot  or 
will  not  insure  themselves.  Even  if  the  as- 
sumption that  wages  are  commensurate  with 
the  risk  involved  were  more  than  a  comfort- 
able fiction,  the  workers  most  in  need  of  pro- 
tection would  be  the  ones  least  likely  to  insure 
themselves  against  accident. 

The   law   of   employers*   liability   in   the 


80  ACCIDENT  COMPENSATION 

United  States  rests  largely  upon  doctrines  of 
the  common  law,  —  respondeat  superior,  con- 
tributory negligence,  the  doctrine  of  assumed 
risk,  and  the  fellow-servant  doctrine,  —  de- 
veloped under  an  outgrown  industrial  organ- 
ization. Its  execution,  moreover,  is  attended 
with  great  expense,  harrowing  uncertainty, 
and  unreasonable  delay.  This  uncertainty  and 
variation  in  liability  obligations  against  em- 
ployers has  been  a  leading  cause  in  the  devel- 
opment of  the  employers'  liability  insurance 
business,  —  a  means  of  protection  for  the  em- 
ployer that  lays  a  heavy  charge  upon  the  pro- 
ducts of  industry  without  making  a  commen- 
surate contribution  of  actual  economic  value. 
The  charge,  therefore,  falls  most  heavily 
upon  the  injured  workingmen  and  their  fam- 
ilies, and  its  crushing  weight  is  apparent  in 
wrecked  homes,  blighted  hopes,  and  lost  op- 
portunities. The  methods  of  production  that 
call  forth  this  modern  form  of  human  misery 
serve  the  interests  of  society  in  the  general 
satisfaction  of  economic  wants,  and,  since  the 
avoidance  of  industrial  accidents  seems  im- 
possible, an  equitable  system  is  demanded 
whereby  these  losses  can  be  distributed.!  The 
personal  temperament  of  the  workingman,  as 
well  as  the  conditions  of  his  life  and  employ- 
ment, precludes  self- protection;  he  cannot 
and  he  will  not  insure  himself,  j  More  than 


CONCLUSION  — SUGGESTED  REMEDIES  81 

this,  accident  losses  cause  such  a  burden  of 
dependent  classes  and  lead  to  such  lowered 
economic  efficiency  that  their  compensation, 
if  prevention  is  impossible,  assumes  prime 
social  importancCy 

The  situation  is  one  demanding  not  only 
a  thorough  reformation  in  legal  principle  and 
procedure,  but  also  insistence  by  the  state 
upon  the  adequate  insurance  of  individual 
workingmen.  What  particular  form  such 
measures  should  take  is  a  problem  too  intri- 
cate for  full  discussion  in  this  essay,  but  val- 
uable hints  may  be  gathered  from  a  brief 
presentation  of  the  underlying  principles  and 
salient  features  of  the  compensation  laws  in 
foreign  countries. 

Such  laws,  in  varying  degrees  of  perfection 
and  widely  different  in  detail,  have  been 
enacted  in  twenty-four  foreign  states,  includ- 
ing seven  British  Colonies  and  all  of  the 
nations  of  Europe,  except  the  Balkan  states.^ 
The  British  acts,  while  liberal  in  their  provi- 
sions and  well  calculated  to  encourage  settle- 

^  ^  The  full  text  of  these  laws  comprises  as  pecial  volume.  Laws  Re- 
lating to  Compensation  for  Industrial  Accidents  in  Foreign  Countries, 
in  the  Twenty-fourth  Annual  Report  of  the  United  States  Commis- 
sioner of  Labor.  The  methods  of  business  administration  followed  in 
the  leading  nations  are  analyzed  in  Comparative  Legislation  Bulletin 
No.  20,  of  the  Legislative  Reference  Department  of  the  Wisconsin 
Library  Commission.  See  also  Workingmen  s  Insurance  in  Europe, 
by  Lee  K.  Frankel  and  Miles  M.  Dawson. 


82  ACCIDENT  COMPENSATION 

ment  without  suit,  are  strongly  marked  with 
the  principles  of  individual  responsibility  so 
generally  characteristic  of  Anglo-Saxon  law. 
Those  of  the  Continental  states,  while  no  less 
committed  to  the  principle  of  fixed  compen- 
sation, are  usually  filled  with  detailed  pro- 
vision, that  is  commonly  considered  pater- 
nalistic, for  the  social  distribution  of  accident 
losses. 

Since  the  widely  criticised  law  of  employers' 
liability  in  the  United  States  is  based  upon  the 
fundamental  principles  of  the  Anglo-Saxon 
common  law,^  the  experience  of  Great  Britain 
is  of  especial  importance.  As  industrial  organ- 
ization became  more  complex  and  employers 
came  to  be  farther  and  farther  removed  from 
their  men,  Great  Britain  found  this  judge- 
made  law  more  and  more  unsatisfactory.  The 
principles  of  contributory  negligence  and  as- 
sumed risk  became  so  flagrantly  unjust,  and 
the  fellow-servant  doctrine  was  carried  to 
such  unwarranted  applications,  that,  after 
long  and  tumultuous  agitation,  they  were  all 
greatly  modified,  and  the  recovery  of  damages 
facilitated  by  the  Employers*  Liability  Act  of 
1880.  The  English  law  was  then  comparable 
to  that  in  those  of  the  United  States  at  the 
present  time  where  the  common  law  has  been 
largely   modified   by   statutory  enactments. 

'  See  pages  51-55. 


CONCLUSION  — SUGGESTED  REMEDIES  83 

Many  men  had  good  cases  at  law,  but  the  ob- 
ligations imposed  upon  employers  were  in- 
definite, great  expense  and  long  delay  were 
necessary  to  litigation,  and  the  risks  were 
great,  both  on  the  part  of  the  master  and  of 
the  servant.  Makeshifts  grew  up.  It  was  in  the 
decade  following  the  passage  of  this  act  that 
liability  insurance  was  first  offered  to  employ- 
ers, while  workingmen,  as  in  the  United  States 
at  the  present  time,  were  dependent  for  pro- 
tection upon  cooperative  agencies  and  private 
insurance  companies.  The  needless  burden  of 
the  dual  system  soon  became  apparent,  atten- 
tion was  again  directed  towards  corrective 
legislation,  and,  in  a  series  of  enactments  dat- 
ing from  1897  to  1906,  the  uncertain  obliga- 
tions of  employers'  liability  were  abandoned, 
and  a  moderately  liberal  scale  of  compensa- 
tions was  set  up  as  a  promise  to  the  working- 
men  in  a  broad  range  of  industries.^  This 
compensation  is  paid  largely  without  regard  to 
individual  responsibility  for  the  accident,  and 
is  recoverable  in  a  manner  calculated  to  reduce 
expense  and  delay  to  a  minimum.  The  scale  of 
compensation  provides,  in  the  case  of  death, 
for  a  lump  payment  to  dependents  equal  to 
three  years'  wages,  but  not  more  than  $1459, 
and  not  less  than  $729.  If  no  dependents  are 

*  It  is  significant  that  the  initial  act  of  1897  was  passed  by  a  Con- 
servative government. 


84  ACCIDENT  COMPENSATION 

left,  funeral  expenses  are  paid  up  to  a  maxi- 
mum of  $48.  Persons  disabled,  whether  wholly 
or  partially,  permanently  or  temporarily,  are 
granted  pensions  adjusted  to  meet  the  require- 
ments of  the  individual  case,  but  they  may 
not  exceed  fifty  per  cent  of  the  former  earnings. 
Plaintiffs  may  sue  instead,  if  they  so  desire, 
under  either  the  old  common-law  doctrines 
or  under  the  Act  of  1880,  and  failure  to  re- 
cover under  either  or  both  of  these  may  be 
followed  by  a  subsequent  suit  under  the  Com- 
pensation Act.  It  is  provided  in  such  cases, 
however,  that  the  defendant's  costs  in  the 
earlier  suit  or  suits  shall  be  deducted  from  the 
final  awards.  That  this  provision,  together 
with  the  liberality  of  the  Compensation  Act, 
has  greatly  reduced  the  number  of  suits  under 
the  older  law,  is  evidenced  by  the  following 
statement  of  the  Home  Office :  — 

The  extent  to  which  the  remedy  given  by  the  Em- 
ployers' Liability  Act  of  1880  is  faUing  into  disuse  is 
very  notable.  Only  260  cases  altogether  were  taken 
into  English  county  courts  during  the  year  under  this 
act;  of  these,  148  were  withdrawn,  settled  out  of  court, 
etc.,  and  of  the  remainder  the  plaintiff  was  successful 
in  only  67.  Only  one  case  was  taken  under  the  act  in 
the  whole  of  the  mining  industry,  and  that  was  finally 
disposed  of  without  being  decided  by  the  court;  one 
case  in  the  quarry  industry,  seven  cases  in  the  railway 
industry.^ 

*  Report  of  the  Home  Office  for  1908  on  Workmen's  Compensation, 
p.  21. 


CONCLUSION  — SUGGESTED  REMEDIES  85 

But  recoveries  are  still  attended  with  a  great 
amount  of  litigation.  Out  of  3447  fatal  cases 
occurring  in  1908  in  seven  industries,  —  ship- 
ping, docks,  railways,  factories,  construction, 
mines,  and  quarries,  — 1852  cases,  or  53.7 
per  cent,  were  taken  into  court  for  the  settle- 
ment of  claims.^  The  showing  in  regard  to 
non-fatal  cases  is  better.  Out  of  296,338  such 
cases  in  the  same  industries  during  the  same 
time,  only  2763,  or  less  than  one  per  cent, 
were  taken  into  court. 

Since  1884  German  employers  in  most  in- 
dustries have  been  required  to  insure  against 
injury  in  the  course  of  employment,  all  ad- 
ministrative employees  receiving  less  than 
$714  annually,  and  all  workingmen.^  In  fatal 
cases,  the  law  stipulates,  a  pension  is  granted 
the  widow  equal  to  twenty  per  cent  of  the 
annual  earnings,  and  an  additional  pension 
of  twenty  per  cent  is  granted  for  each  child 
until  it  reaches  fifteen  years  of  age.  A  total 
pension  equal  to  twenty  per  cent  of  the  former 
earnings  of  the  employee  killed  may  be  granted 
to  dependent  ascendants,  and  an  equal  pension 
to  descendants  formerly  dependent  upon  the 

^  Report  of  the  Home  Office  for  1908  on  Worlcmen's  Compensation, 
pp.  21,  22.     The  compensations  paid  in  these  cases  averaged  $750. 

^  The  dramatic  historical  incidents  leading  up  to  the  institution 
of  this  pioneer  social  reform  by  William  I  and  Bismarck  are  outlined 
in  the  report  of  the  New  York  State  Employers'  Liability  Commis- 
sion, pp.  36,  37. 


86  ACCIDENT  COMPENSATION 

deceased,  but  the  total  payments  may,  in  no 
case,  exceed  sixty  per  cent  of  earnings.  Fu- 
neral expenses  are  paid  equal  to  one  fifteenth 
of  the  annual  earnings,  but  not  less  than 
$11.90.  Pensions  in  disability  cases  are  pro- 
portionate to  the  degree  and  duration  of  inca- 
pacity, but  are  limited  to  a  maximum  of  two 
thirds  of  earnings,  except  that  the  pension 
may  be  increased  up  to  one  hundred  per  cent 
if  the  degree  of  injury  is  such  that  care  and 
attention  by  others  is  permanently  necessary 
to  the  comfort  of  the  victim.  In  all  cases  the 
expense  of  medical  and  surgical  treatment  and 
hospital  care  is  included.  Employers  are  re- 
quired by  law  to  join  mutual  trade-group 
insurance  organizations,  and  these  concerns, 
subject  to  rigid  legal  stipulation,  and  under 
the  close  supervision  of  the  imperial  insurance 
office,  assume  all  accident  hazards.  Rates  are 
proportionate  to  the  risks  involved,  and  de- 
pend in  great  measure  upon  the  safety  rating 
of  each  individual  plant  or  factory. 

The  principle  of  fixed  compensation  first  set 
up  in  1884  by  Germany  was  recognized  in 
Austria  in  1887.  In  that  year  an  act  became 
effective  providing,  in  fatal  cases,  widows' 
pensions  of  twenty  per  cent,  and  an  addi- 
tional twenty  per  cent  for  each  child  until  it 
reaches  fifteen  years  of  age.  Ascendants  de- 
pendent for  support  upon  the  former  earn- 


-  CONCLUSION  — SUGGESTED  REMEDIES  87 

ings  of  the  deceased  may  receive  pensions  not 
exceeding,  in  the  aggregate,  twenty  per  cent 
of  the  former  earnings  of  the  deceased,  and  the 
total  of  all  pensions  is  limited  to  fifty  per  cent. 
In  any  case,  funeral  expenses  are  payable,  not 
exceeding  $10.15.  If  the  accident  results  in 
disability,  the  pension  is  fixed  at  an  amount 
proportionate  to  the  loss  of  earning  power, 
but  it  may  not  exceed  sixty  per  cent  of  the 
average  earnings  before  the  accident. 

In  place  of  the  German  system  of  insurance 
in  mutual  trade-group  organizations,  the  re- 
quirements of  the  Austrian  law  are  met  by 
seven  territorial  insurance  concerns.  These 
organizations  inspect  and  classify  risks,  fix 
rates,  and  administer  the  provisions  of  the 
compensation  act  under  strict  imperial  con- 
trol. Another  important  difference  in  admin- 
istrative methods  is  found  in  the  manner  of 
providing  the  funds  for  future  payments 
throughout  the  lifetime  of  the  pensioner.  In 
Germany  such  funds  are  collected  by  the 
trade-group  organizations  during  the  year  in 
which  the  payment  becomes  due.  Differences 
are  partially  equalized  by  means  of  a  com- 
plicated scheme  for  a  reserve  fund,  but  the 
plan  is  far  from  satisfactory.  In  Austria,  the 
annual  pension  is  capitalized  when  granted, 
and  the  total  of  all  payments  is  then  forecast 
upon  actuarial  principles.  This  sum,  with  due 


88  ACCIDENT  COMPENSATION 

allowance  for  interest,  is  then  regarded  as  the 
actual  cost  of  the  pension  grant,  and  the  sum 
is  set  aside  to  meet  future  demands.^ 

In  France  a  law  enacted  in  1898  makes  em- 
ployers in  the  principal  industries  responsible 
for  accident  losses,  and  provides  for  pensions. 
In  case  of  death,  a  pension  of  twenty  per  cent 
of  the  former  earnings  of  the  deceased  is 
granted  to  the  surviving  consort,  and  the 
additional  pension  for  children  is  from  fifteen 
to  forty  per  cent  —  depending  upon  the  num- 
ber under  sixteen  years  of  age.  Dependent 
ascendants  and  descendants  may  be  granted 
pensions  of  ten  per  cent  each,  but  payments 
to  such  persons  may  not  exceed,  in  all,  thirty 
percent  of  the  former  earnings  of  the  deceased. 
Funeral  expenses  are  allowed  up  to  a  maxi- 
mum of  $19.30.  In  non-fatal  cases,  when  the 
incapacity  for  work  is  total  and  permanent, 
the  pension  is  fixed  at  two  thirds  of  the  former 
earnings;  when  partial  and  permanent,  at  one 
half  of  the  reduction  in  earning  power;  and 
when  only  temporary,  at  one  half  of  earnings. 
Employers  are  also  charged  with  the  cost  of 
medical  and  surgical  attendance  and  hospital 
care.  Insurance  may  be  taken  in  any  manner 
the  employer  sees  fit,  or  not  at  all  if  he  chooses 

'  These  two  methods  are  critically  discussed  by  Professor  W.  F. 
Willoughby  in  Workingmens  Insurance,  p.  104,  and  bj'  the  New 
York  State  Employers'  Liability  Commission  on  page  45  of  the 
report  cited  above. 


CONCLUSION  — SUGGESTED  REMEDIES  89 

to  carry  the  risk  himself,  but,  while  the  insol- 
vency of  those  responsible  for  pensions  is  not 
guarded  against  as  carefully  as  in  Germany 
and  Austria,  the  need  is  met  less  perfectly  by 
a  guarantee  fund.  This  fund  is  raised  by  a 
special  license  tax  on  the  industries  to  which 
the  compensation  law  applies,  and  is  adminis- 
tered by  the  National  Old  Age  Pension  Fund. 
The  industrial  insurance  law  of  Italy  cov- 
ers a  very  broad  range  of  employments.  The 
initial  act  was  passed  in  1898.  The  death 
of  a  worker  by  accident  is  compensated  by 
a  payment  equal  to  five  years'  earnings,  ap- 
portioned among  dependent  descendants  or 
ascendants,  in  the  form  of  either  pensions  or 
lump  payments,  according  to  social  condition, 
financial  need,  and  closeness  of  relationship  to 
the  deceased.  If  disability  is  total  and  per- 
manent, the  compensation  is  a  payment  equal 
to  six  years'  earnings,  but  not  less  than  $579; 
if  permanent  and  partial,  six  times  the  reduc- 
tion in  annual  earnings;  and  if  temporary, 
whether  total  or  partial,  one  half  of  the  loss 
in  earnings.  The  employer  also  meets  the  cost 
of  immediate  medical  aid.  Employers  are 
obliged  to  insure  their  men  for  the  amount  of 
these  compensations,  and  are  heavily  penal- 
ized for  failure  to  do  so.  Insurance  must  be 
in  a  national  insurance  fund,  or  in  private  so- 
cieties or  companies,  except  that  individual 


90  ACCIDENT  COMPENSATION 

employers  hiring  over  five  hundred  men  or 
groups  of  them  hiring  over  four  thousand  may 
be  permitted  to  carry  their  own  risks  by  de- 
positing approved  securities.  Unclaimed  com- 
pensations, fines,  and  other  miscellaneous 
payments  constitute  a  special  fund,  one  of  the 
uses  of  which  is  to  guarantee  compensation 
charges  not  otherwise  met. 

The  accident  compensation  and  industrial 
insurance  laws  of  Hungary,  Belgium,  The 
Netherlands,  Denmark,  Norway,  Sweden,  Fin- 
land, Greece,  and  Luxembourg  are  also  rich  in 
the  suggestion  of  methods  which  might  be 
adapted  to  American  conditions.^ 

It  must  always  be  borne  in  mind,  however, 
that  wide  differences  in  social  and  economic 
conditions,  as  well  as  in  the  trend  of  public 
opinion,  make  it  unwise  to  transplant  any 
system,  in  its  entirety,  into  the  United  States.^ 
Nevertheless,  the  study  of  the  situation  at 
home  and  abroad  suggests  a  programme  for  re- 
form, and  its  ultimate  accomplishment  should 
be  held  constantly  in  view.^ 

I.  Employers  should  he  held  accountable  for 

*  See  note  1,  p.  81. 

*  These  laws  are  ably  discussed  with  reference  to  their  adaptation 
to  American  needs  in  the  Report  of  the  New  York  State  Employera' 
Liability  Commission,  pp.  44-49. 

*  These  suggestions  have  been  drawn  in  part  from  Trades  Unionism 
and  Labor  Problems,  by  Professor  John  R.  Commons,  pp.  568  et  seq. 


CONCLUSION  — SUGGESTED  REMEDIES  91 

the  safety  of  surroundings  and  equipment.  This 
is  now  recognized  in  Great  Britain,  and  in 
most  of  the  states  of  Continental  Europe.  In 
nine  American  states  this  principle  is  applied 
to  all  industries;  in  five  others,  to  railways; 
and  in  nineteen  more,  responsibility  is  thrown 
upon  employers  who  fail  to  comply  with  legal 
requirements  concerning  stated  safety  devices 
and  precautions.  Its  general  acceptance  in  the 
United  States  would  largely  abolish  the  doc- 
trine of  assumed  risk,  and  greatly  reduce  liti- 
gation. 

II.  Employers  should  be  held  accountable  for 
the  negligent  acts  of  their  employees.  This  prin- 
ciple also  is  accepted  in  most  of  the  countries 
of  Europe  and  in  three  American  states.  In 
ten  others  it  is  recognized  in  part,  and  in  eight- 
een more  it  applies  to  specified  industries.  Its 
general  acceptance  would  abolish  the  fellow- 
servant  doctrine  and  restore  the  principle  of 
respondeat  superior  to  the  full  range  of  legal 
application  that  it  should  properly  have. 

III.  The  employer's  defense  of  contributory 
negligence  should  be  denied.  The  working- 
man's  environment  makes  constant  care  im- 
possible, and  this  general  defense  against  lia- 
bility works  grave  injustice.  Industry  should 
bear  its  inevitable  accident  losses,  as  it  bears 
its  inevitable  fire  losses  and  maintenance 
charges.    No  part  of  the  burden  should  be 


92  ACCIDENT  COMPENSATION 

thrown  upon  those  whose  earning  power  is 
sacrificed.  In  most  European  nations  only 
such  contributory  neghgence  as  is  willful,  un- 
reasonable, or  unlawful  bars  the  victim  from 
the  right  to  compensation,  and  recognition  of 
the  same  principle  should  be  an  early  reform 
in  American  legislation. 

IV.  Employers  should  be  held  accountable 
for  unpreventable  accidents.  In  spite  of  all  pos- 
sible precaution,  many  workingmen  are  sure 
to  be  killed  and  injured.  Neither  employers 
nor  employees  are  at  fault  in  such  cases,  but 
since  such  accidents  seem  necessary  in  the  cre- 
ation of  economic  goods,  the  burden  should 
be  placed,  through  the  employer,  upon  the 
ultimate  consumer  of  the  finished  product. 
This  principle  is  fully  recognized  in  Europe, 
and  is  faintly  suggested  by  a  recent  law  in 
Montana.^  Its  general  acceptance  in  the 
United  States,  together  with  the  recognition 
of  the  first  and  second  principles  outlined, 
would  completely  abolish  the  doctrine  of  as- 
sumed risk. 

V.  Employers  should  bear  the  burden  of 
proof.  By  the  English  Act  of  1897  it  is  made 
the  part  of  the  employer  to  show  that  the  law 
is  not  applicable  to  the  case  in  question,  and 
the  same  principle  has  been  partially  accepted 
on  the  Continent.  Two  American  states  throw 

*  See  hereafter,  p.  94. 


CONCLUSION  — SUGGESTED  REMEDIES  93 

the  burden  of  proof  on  the  employer  in  rail- 
road cases.  The  victim  of  the  accident  is  in- 
variably the  weaker  party  to  the  controversy, 
and  the  general  acceptance  of  this  principle 
would  make  workingmen  more  secure  in  the 
rights  conferred  by  other  reforms. 

VI.  Compensations  should  be  paid  according 
to  a  definite  scale  fixed  by  law  and  varying  ac- 
cording to  the  age  and  pecuniary  situation  of 
dependents.  The  principle  of  fixed  compensa- 
tion was  recognized  by  the  English  Act  of 
1897;  it  has  spread  to  the  British  colonies,  and 
the  definite  but  variable  scale  of  payments 
and  pensions  is  a  meritorious  feature  of  the 
compensation  laws  of  the  states  on  the  Con- 
tinent. In  America  a  few  states  set  maximum 
limits  to  the  liability  of  employers  on  account 
of  any  one  casualty,  but  that  is  all.  One  of  the 
most  flagrant  abuses  under  the  existing  sys- 
tem of  law  is  the  spirit  of  speculation  that 
is  fostered  by  the  ever  dazzling  possibility  of 
a  large  award.  The  establishment  of  a  defi- 
nitely variable  scale,  together  with  the  greater 
certainty  of  award  that  would  be  lent  by  the 
other  reforms  outlined,  would  go  far  in  re- 
ducing the  volume  and  expense  of  litigation. 
Fewer  cases  would  come  to  trial,  and  jury 
awards  would  be  more  readily  accepted  with- 
out appeal. 

VII.  Payment  should  be  guaranteed  by  ade- 


94  ACCIDENT  COMPENSATION 

quale  insurance.  A  great  catastrophe  or  some 
other  cause  often  leads  to  the  insolvency  of 
the  employer  at  a  time  when  the  injured  men 
and  their  dependents  are  most  in  need  of  assist- 
ance. The  methods  of  guarantee  used  in  Ger- 
many, Austria,  France,  and  Italy  have  been 
described,  and  more  or  less  effective  plans  are 
followed  in  other  countries.  First  lien  on 
assets  and  compulsory  state  insurance  are 
most  frequently  resorted  to.  The  statutes  of 
Massachusetts  and  New  York  provide  that 
any  employer  may  partially  disburden  himself 
of  liability  by  insuring  his  men  in  private  in- 
surance companies,  but  he  is  not  obliged  to 
do  so.^  In  Montana  a  law  passed  in  1909  pro- 
vides a  special  tax  of  one  per  cent  on  the  earn- 
ings of  coal-miners  and  of  one  cent  per  ton  on 
all  coal  mined.  The  proceeds  make  up  a  state 
fund  for  the  generous  compensation  of  acci- 
dents in  the  coal -mining  industry.  ^  Efforts 
to  compel  employers  to  insure  their  men 
against  accident  would  be  met  with  active 
resistance  in  the  United  States,  and  require- 
ments as  rigid  as  those  of  Germany  and  Aus- 
tria would  be  justly  condemned  by  public 
opinion.    But  to  secure  its  citizens  in  their 

*  A  later  law  in  New  York  requires  the  employers  of  men  in  a  few 
of  the  hazardous  trades  to  insure  them  against  injury  while  at  work. 

^  The  underlying  principles  of  this  law  are  advanced  beyond  those 
of  any  similar  statute  in  the  United  States,  but  the  detail  is  crudely 
worked  out. 


CONCLUSION  — SUGGESTED  REMEDIES  95 

personal  rights  is  a  proper  police  function  of 
the  state,  and  our  laws  should  insist  that  em- 
ployers, at  their  own  expense,  insure  their  men 
for  the  amount  of  the  stipulated  compensa- 
tions. Such  guarantee  should  be  by  insurance 
in  private,  mutual,  or  governmental  casualty 
concerns,  or  by  the  deposit  of  approved  secu- 
rities. 

VIII.  Compensation  payments  should  be 
conserved.  Many  persons  left  dependent  are 
incompetent  to  care  for  large  sums  of  money 
suddenly  acquired.  Courts  of  proper  juris- 
diction should  be  given  authority  to  deter- 
mine whether  lump  payments  should  be  made 
or  the  sum  invested  in  annuities.  The  pension 
systems  of  the  Continental  European  states 
are  rich  in  the  suggestion  of  administrative 
methods  for  accomplishing  this  purpose. 

The  incorporation  of  these  principles  into 
the  American  law  of  employers'  liability  will 
be  found  a  long  and  difficult  process,  for  many 
obstacles  exist,  both  in  social  and  economic 
conditions,^  and  in  constitutional  law  and  judi- 

*  That  the  cost  of  adequate  compensation  would  be  found  alto- 
gether too  small  to  give  cause  for  serious  concern  is  strongly  suggested 
by  the  following  statistical  comparisons. 

During  the  decade  ending  with  1908,  as  shown  by  Table  XII  on  page 
24,  a  total  of  251,685  days'  time  was  lost  on  account  of  temporary 
injuries  to  employees  in  the  coal  mines  of  Illinois.  During  the  same 
time,  as  reported  by  the  Illinois  Bureau  of  Labor  Statistics,  the 


96  ACCIDENT  COMPENSATION 

cial  fancy.  It  is  doubtful  if  adequate  legisla- 
tion can  be  enacted  in  many  states  without 
constitutional  amendments,  and  it  is  not  im- 
probable that  an  amendment  to  the  federal 
constitution  will  be  found  necessary.  But  the 
outlook  is  hopeful.  Twelve  years  ago  it  was 
said  of  workmen's  compensation,  *'The  very 
principles  involved  are  not  as  yet  even  compre- 
hended in  the  United  States."  ^  Public  inter- 
est has  since  been  aroused  by  the  results 
of  wide  research;  close  attention  has  been 
turned  upon  every  phase  of  the  subject,  and 
it  is  one  of  the  leading  topics  before  the  Amer- 
ican people  at  the  present  time.    Employers, 

mines  of  the  state  produced  349,850,318  tons  of  coal,  or  1,390  tons 
for  each  day's  time  lost  on  account  of  temporary  injuries.  This  com- 
parison, to  be  sure,  takes  no  account  of  accidents  that  resulted  in 
death  or  in  permanent  injury,  but  statistics  presented  by  Table  VII  on 
page  12  make  it  clear  that  adequate  payment  for  all  casualty  losses 
would  be  only  a  moderate  burden  upon  the  coal-mining  industry. 
During  the  decade  ending  with  1908,  it  is  there  shown,  178,266  tons 
of  coal  were  mined  in  Illinois  and  Pennsylvania  for  each  employee 
killed,  and  78,195  tons  for  each  one  injured,  —  a  volume  of  produc- 
tion so  large  that  a  very  small  proportion  of  it  would  be  ample  for 
all  compensation  costs.  Again,  it  is  seen  by  reference  to  Table  VIII  on 
page  14  that  23,895  employees  were  killed  and  335,964  were  injured 
on  the  railways  of  the  country  during  the  seven  years  ending  June 
SO,  1908.  In  comparison  with  this  large  total  of  casualties,  the  vol- 
ume of  railway  service  as  reported  by  the  Interstate  Commerce 
Commission  is  so  tremendous  that,  leaving  freight  service  out  of  all 
account  and  considering  only  passenger  service,  one  mill  for  each 
"passenger  mile"  of  traffic  (one  passenger  carried  one  mile),  would 
be  sufficient  to  pay  an  average  compensation  of  three  hundred  dol- 
lars to  each  employee  injured  and  an  average  of  three  thousand  to 
the  heirs  of  each  one  killed. 

^  Willoughby,  Workingmen's  Insurance,  p.  329. 


CONCLUSION  — SUGGESTED  REMEDIES    97 

insurance  men,  lawyers,  legislators,  jurists, 
publicists,  and  leaders  in  social  reform  are 
focusing  attention  upon  the  question  with  a 
unanimity  of  interest  that  is  almost  unprece- 
dented. It  was  a  live  issue  before  the  last 
meeting  of  the  National  Civic  Federation;  it 
is  constantly  before  associations  of  manufac- 
turers and  other  bodies  of  employers,  and 
there  have  been  held  within  a  year  three  na- 
tional conferences^  upon  this  question  alone. 
During  the  early  months  of  1909,  changes  in 
the  law  were  under  consideration  in  at  least 
seventeen  states.  Significant  amendments 
have  been  passed  in  some,  while  in  others, 
notably  in  New  York,  Wisconsin,  Minnesota, 
and  Illinois,  special  commissions  are  making, 
or  have  completed,  more  or  less  exhaustive 
studies.  In  addition  to  this,  two  of  the  lar- 
gest American  employers,  the  United  States 
Steel  Corporation  and  the  International  Har- 
vester Company,  have  instituted  accident 
relief  plans,  as  described  in  Chapter  III,  that 
are  strikingly  similar  to  the  compulsory  in- 
surance and  compensation  systems  of  Con- 
tinental Europe.  — \ 
The  situation  presents  a  problem  in  the 
equitable  distribution  of  the  fruits  of  industry. 
Production  commands  a  sufficient  economic 

1  Atlantic  City,  N.J.,  August,  1909;  Washington,  D.  C,  January, 
1910 ;  and  Chicago,  June,  1910. 


98;  ACCIDENT  COMPENSATION 

return  to  meet  all  of  its  legitimate  charges, 
and  a  reasonable  portion  should  be  turned  to 
the  account  of  those  unfortunates  whom  in- 
dustrial accidents  leave  without  means  of  live- 
lihood. The  costs  fall  with  crushing  force 
upon  the  individual  victims.  If  these  costs 
were  to  fall  upon  the  enormous  capital  and 
tremendous  earning  power  of  the  industrial 
world,  they  would  seem  insignificant.  Yet 
absurd  legal  precedents  set  up  generations 
ago,  and  now  dishonored  [at  their  source,  are 
effective  barriers  against  proper  distribution. 
Legislation  that  pulls  down  these  barriers  will 
add  much  to  the  security,  contentment,  and 
efficiency  of  the  workers  of  American  indus- 
try., 


INDEX 


INDEX 


Accidents,  see  industrial  acci- 
dents. 

Administration  of  compensation 
agencies,  aid  societies,  29,  30; 
relief  systems,  38-47;  work- 
men's collective  insurance,  47- 
49;  English  law,  82-85;  Ger- 
man law,  85,  86;  Austrian  law, 
86,  87,  German  and  Austrian 
compared,  87,  88;  French  law, 
88,  89;  Italian  law,  89,  90;  law 
suggested  for  United  States, 
90-95. 

Ages  of  victims  of  industrial  acci- 
dents, Pittsburg,  19;  Illinois, 
19;  Minnesota,  20;  Wisconsin, 
20,  21;  charity  experience, 
facing  p.  26. 

Aid  societies  compensating  in- 
dustrial accident  losses,  29,  30; 
objections  to,  30,  31. 

Assumed  risks,  doctrine  of,  53, 
54,  91,  92;  relation  of,  to  fellow- 
servant  doctrine,  54,  91;  modi- 
fications of,  55,  56. 

Business  will  not  be  disturbed  by 
proper  compensation,  95  (note) . 

Casualty  insurance,  see  insurance. 

Chicago,  industrial  accidents  in, 
2-4,  13;  charity  experience  in, 
26,  27. 

Chicago,  Burlington  and  Quincy 
Railroad  Company,  relief  sys- 
tem of,  40,  41. 

Child  labor,  influence  of  indus- 
trial accident  losses  on,  25,  26. 

Coal-mining  accidents,  the  United 
States,  10;  Illinois,  10-12;  Penn- 
sylvania,10-12;  Europe,  16. 

Common  law,  see  employers' 
liability. 


Commons,  Professor  John  R.,  90 
(and  note). 

Compensation  for  industrial  ac- 
cident losses  by  voluntary 
agencies,  collections,  29;  aid 
societies,  29-31;  fraternal  soci- 
eties, 30,  31;  trades  unions,  31- 
33;  "industrial"  insurance, 
32-34;  accident  insurance,  32, 
34;  payments  by  employers, 
36,  37;  railway  relief  depart- 
ments, 38-41;  industrial  relief 
systems,  38-47;  workmen's 
collective  insurance,  47-49; 
general  criticism  of  voluntary 
agencies,  35,  49,  50,  79;  com- 
pensations paid  by  liability 
insurance  companies,  67-69. 
See  death  payments  and  dis- 
ability payments. 

Compensation  laws,  in  foreign 
states,  81,  90  ;  Great  Britain, 
81-85;  Germany,  85,  86;  Aus- 
tria, 86-88;  France,  88,  89; 
Italy,  89,  90;  Montana,  94. 

Compensation,  methods  for  guar- 
antee of  payments,  85-90,  93, 
94  (and  note);  Germany,  85- 
88;  Austria,  87,  88;  France. 
88,  89;  Italy,  89,  90;  New 
York,  94  (note). 

Compensation  problem,  timeli- 
ness of,  62,  76  (note),  81,  96, 
97. 

Compulsory  insurance,  see  in- 
surance. 

Conclusions  (general),  76-81. 

Cook  County  (Chicago),  indus- 
trial accidents  in,  2-4;  charity 
experience  in,  26,  27. 

Coroner's  records,  Chicago,  in- 
dustrial accidents  shown  by, 
2-4. 


102 


INDEX 


Corporations,  special  employers' 
liability  laws  applying  to,  55. 

Cost  of  compensation,  in  case 
of  Cherry,  Illinois,  mine  disas- 
ter, 37;  relief  systems,  38-47; 
workmen's  collective  insur- 
ance, 47,  48;  Montana  law,  94; 
probable  in  coal-mining  and 
railway  industries,  95  (note); 
should  be  borne  by  consumer, 
76,  80,  91,  92. 

Death  payments,  aid  societies, 
29;  trades  unions,  31,  32,  33; 
"industrial"  insurance,  34,  35; 
Cherry,  Illinois,  mine  disaster, 
37;  relief  systems,  39;  Chicago, 
Burlington  and  Quincy Railroad 
Company,  40;  International 
Harvester  Company,  42,  43, 
46;  United  States  Steel  Cor- 
poration, 44;  workmen's  col- 
lective insurance,  48;  Great 
Britain,  83,  84,  85  (note); 
Germany,  85,  86;  Austria,  86, 
87;  France,  88;  Italy.  89. 

Defects  in  equipment,  special 
liability  laws  relating  to,  56. 

Dependents  of  miners  injured  at 
work,  Illinois,  22-24;  Pennsyl- 
vania, 22,  23,  25,  26. 

Disability  payments,  aid  socie- 
ties, 29,  30;  by  employers, 
36  (and  note);  relief  systems, 
39;  Chicago,  Burlington  and 
Quincy,  40,  41;  International 
Harvester  Company,  42,  46, 
47;  United  States  Steel  Cor- 
poration, 43,  44;  Workmen's 
Collective  Insurance,  48;   spe- 

'  cial  cases,  49,  50;  Great  Brit- 
ain, 84;  Germany,  86;  Austria, 
87;  France,  88;  Italy,  89. 

Edison  Company,  the  New  York, 

wage     payments     to     injured 

employees,  36. 

Employers'     liability,     common 

1    law,     52-55;     negligence,     62; 

respondeat     superior,    62,   91; 


contributory  negligence,  52, 
91;  assumed  risk,  53-55,  91,  92; 
fellow-servant  doctrine,  54,  55, 
91;  common  to  England  and 
the  United  States,  54,  55 ;  criti- 
cism of,  57-62,  79,  80. 

Employers'  liability,  statute  law, 
55-58,  81-90;  United  States, 
55-57;  foreign,  81-90;  Great 
Britain,  82-85;  Germany,  85, 
86;  Austria,  86,  87;  France,  88, 
89;  Italy,  89,  90. 

Employers'  liability,  "release" 
to  employer  by  injured  em- 
ployee, 36  (and  note),  41,  42, 
45,  46,  49;  general  criticism, 
57-62,  63,  64,  74,  80,  81;  re- 
forms suggested,  90-96;  Ameri- 
can conferences  relating  to,  97. 

Employers'  liability  insurance, 
see  insurance. 

Europe,  industrial  accidents  in, 
15-17,  77.  See  employers'  lia- 
bility, compulsory  insurance, 
and  compensation. 

Expense  of  compensation,  see 
cost  of  compensation. 

Factories,  special  liability  laws 
relating  to,  55,  56. 

Family,  effects  of  industrial  acci- 
dents on,  18,  21-27. 

Fellow-servant  doctrine,  54,  55, 
60,  91;  modifications  of,  56,  67, 
82,  83. 

Fraternal  societies,  relieving  in- 
dustrial accident  losses,  31. 

Graduation  of  compensation  pay- 
ments, Chicago,  Burlington 
and  Quincy  Railroad,  40;  In- 
ternational Harvester  Com- 
pany, 42,  46,  47;  United  States 
Steel  Corporation,  43,  44; 
Great  Britain,  83,  84;  Germany, 
85,  86;  Austria,  86,  87;  France, 
88;  Italy,  89. 

Great  Britain,  coal-mine  em- 
ployees injured,  16;  railway 
employees    injiu-ed,    17;    em- 


INDEX 


103 


ployers'  liability  law  of,  52-54, 

82-85. 
Guarantee  of  payments,  Ger- 
many, 85,  86;  Austria,  87; 
France,  88,  89;  Italy,  89,  90; 
need  for,  in  United  States,  93, 
94. 

Harvester  Company,  see  Inter- 
national Harvester  Company. 

Henderson,  Professor  C.  R., 
quoted,  28  (note),  29  (note), 
33,  38  (note),  58,  71. 

Illinois,  Industrial  accidents  in, 
7,  11,  12;  coal-mining  accidents 
in,  11,  12;  age  of  victims  of 
industrial  accidents,  19;  wid- 
ows and  orphans  of  coal-miners 
killed  at  work  in,  22,  23;  time 
lost  and  dependents  affected 
by  coal-mine  accidents  in,  24; 
employers'  liability  commis- 
sion of,  97. 

Industrial  accidents,  statistics  of, 
1-17;  Pittsburg,  Pennsylvania, 
1,  2;  coroner's  records  (Chi- 
cago), 2-4;  census  reports,  4, 
5;  Minnesota,  5,  6;  Iowa,  6; 
Wisconsin,  6,  7;  Illinois,  7,  11, 
12;  Michigan,  7,  8;  Ohio,  8; 
Pennsylvania,  8,  11,  12;  New 
Jersey,  9;  New  York,  9;  coal- 
mining, 11,  12;  iron  and  steel 
manufacture,  11,  13;  railway 
operation,13-15;Europe,15-17. 

Industrial  accidents,  social  cost 
of,  18-27;  age  of  victims,  18-21; 
families  of  victims,  21-26;  re- 
sultant dependency,  .25-27. 

Industrial  accidents,  coal-mine 
disaster  at  Cherry,  Illinois,  37; 
complete  avoidance  not  possi- 
ble, 76-79;  due  largely  to  mod- 
ern conditions,  76  (note) ;  efforts 
to  reduce  number  successful,  77 
(and  note);  reasons  for  large 
number  in  the  United  States, 
78;  psychology  of  negligence, 
78. 


Insurance,  accident  compensa- 
tion by  means  of,  29-35,  37 
(note).  38-43,  47-49,  67-69, 
85,  87-90,  93,  94;  fraternal,  31; 
trade-union,  31-33,  37  (note); 
"industrial,"  33,  34;  accident, 
32,  34;  relief  systems,  38-43; 
workmen's  collective  insurance, 
47-49;  insufficiency  of  these 
agencies,   35,   39,  48-50. 

Insurance,  casualty,  34,  71,  72. 

Insurance,  compulsory,  85-90,  93, 
94  (and  note);  Germany,  85- 
88;  Austria,  87,  88;  France,  88, 
89;  Italy,  89,  90;  New  York,  94 
(note). 

Insurance,  employers'  liability, 
58,  63-75;  nature  of,  63,  64- 
67;  the  contract,  64,  65,  67; 
average  of  claims  paid,  67,  68; 
delays  in  settlement,  68,  69; 
premiums  received  and  claims 
paid,  69-70;  expenses  heavy, 
71,  72;  experience  of,  compared 
with  that  of  other  lines  72,  73; 
criticism  of,  63,  65-67,  69.  70, 
72-75. 

International  Harvester  Com- 
pany, employees'  beneflt  as- 
sociation, 41-43;  accident  re- 
lief, plan,  46,  47. 

Interstate  Commerce  Commis- 
sion, reports  of,  concerning 
accidents  to  railway  employees, 
13-15. 

Iowa,  industrial  accidents  in,  6. 

Iron  and  steel  manufacture,  acci- 
dents, in  11,  13. 

Labor  unions,  see  trades  unions. 

Law,  see  employers'  liability. 

Legislation,  see  employers'  lia- 
bility. 

Liability,  52.  See  employers'  lia- 
bility. 

Liability  insurance,  see  insur- 
ance. 

Massachusetts,  persons  maimed 
by  industrial  accidents  in,  4,  5; 


104 


INDEX 


law  relating  to  industrial  in- 
surance in,  9-t. 
Michigan,  industrial  accidents  in, 

7,  8. 

Mining,  special  employers'  lia- 
bility laws  relating  to,  55-57. 

Minnesota,  industrial  accidents 
in,  5,  6;  age  of  victims,  20; 
Labor  Bulletin  quoted,  69;  em- 
ployers' liability  commission  of, 
97. 

Montana,  accident  compensation 
law  of,  94  (and  note). 

Negligence,  common  law  of,  52, 
53;  modifications,  55,  56;  psy- 
chology of  negligence,  78. 

New  Jersey,  industrial  accidents 
in,  9. 

New  York,  industrial  accidents 
in,    9;    accident    compensation 

J  in,  35;  law  relating  to  indus- 
trial insurance,  94;  compulsory 
insurance,  94  (note). 

New  York  State  Employers'  Lia- 
bility Commission,   97;  report 

I  quoted,  35,  76,  77,  85  (note), 
90  (note). 

Ohio,  industrial  accidents  in,  8. 
Orphans  and   widows  of  miners 

killed  at  work,  21-25;  Illinois, 

21-23;     Pennsylvania,     21-23, 

25;  United  States,  22. 
Orphans    and    widows    of    men 

killed    at    work    in    Pittsburg, 

Pennsylvania,  22,  25. 

Pennsylvania,  industrial  acci- 
dents in,  8;  coal-mining  acci- 
dents in,  11,  12;  widows  and 
orphans  of  coal-miners  killed 
at  work  in,  22,  23. 

Pensions  as  means  of  compensat- 
ing accident  losses,  30,  39,  40, 
42-44,  46-49,  83-90,  95;  aid 
societies,  30;  relief  systems, 
39;  Chicago,  Burlington  and 
Quincy  Railroad,  40;  Inter- 
national Harvester  Company, 


42,  46,  47;  United  States  Steel 
Corporation,  43,  44;  work- 
men's collective  insurance,  47, 
49;  Great  Britain,  84;  Ger- 
many, 85,  86;  Austria,  86,  87; 
France,  88;  Italy,  89;  antici- 
pation of  future  payments,  87, 
88;  value  as  means  of  conserv- 
ing awards,  95. 
Pittsburg  "Survey,"  findings  of, 
relating  to  industrial  acci- 
dents, 1,  2,  19,  22,  25;  age  of 
victims,  19;  widows  and  or- 
phans of  victims,  22,  25;  com- 
pensation paid  in  industrial 
accident  cases,  49,  50. 

Railway  accidents  to  employees, 
13-17;  United  States,  13-15; 
Great  Britain,  16,  17. 

Railway  relief  departments,  38- 
41;  Chicago,  Burlington  and 
Quincy  Railroad,  40,  41. 

Railways,  special  liability,  laws 
relating  to,  55-57. 

Reforms  suggested  in  employers' 
liability  law,  90-96. 

Relief  systems,  38-47. 

Respondeat  superior,  52,  91. 

Saint  Paul  Coal  Company,  relief 
work  and  compensation  paid, 
following  mine  disaster  at 
Cherry,  Illinois,  37. 

Steel  and  iron  manufacture,  acci- 
dents in,  11,  13. 

Steel  Corporation,  see  United 
States  Steel  Corporation. 

Trades  unions,  accident  insur- 
ance features  of,  31-33;  railway 
brotherhoods,  31,  32;  trade 
groups,  32,  33;  rates,  32;  insuf- 
ficiency of  insurance,  32,  33. 

United  States,  census  reports  re- 
lating to  industrial  accidents, 
5;  Labor  bulletin  quoted,  5, 
16,  51  (note),  81  (note);  statis- 
tics    of     coal-mine    accidents 


INDEX 


105 


gathered  by  Geological  Survey, 
10;  statistics  of  accidents  to 
railway  employees  gathered  by 
the  Interstate  Commerce  Com- 
mission, 13-15. 
JJnited  States  Steel  Corporation, 
accidents  in  South  Chicago 
plant,  13;  accident  relief  plan 
of,  43y46. 

Wages  commensurate  with  risk 
involved,  53-55;  59-62;  79. 

Wages  paid  by  employer  during 
disability  from  accident,  36,  37, 
43-47,  49,  50. 

Widows  and  orphans  of  miners 


killed  at  work,  21-25;  Illinois, 

21,    23;    Pennsylvania,    21-23, 

25;  United  States,  22. 
Widows    and    orphans   of    men 

killed    at   work    in    Pittsburg, 

Pennsylvania,  22,  25. 
Willoughby,     Professor  '  W.     F., 

quoted,  88  (note),  96. 
Wisconsin,    industrial    accidents 

in,  6;  age  of  victims,  20,  21; 

employers'     liability    commis- 
sion, 97. 
Workmen's  collective  insurance, 

47-49. 
Workmen's    compensation   laws, 

see  compensation  laws. 


CAMBRIDGE  .  MASSACHUSETTS 
U    .    S    .   A 


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Institute  of  Industrial  Relations 

University  of  California 

Los  Angeles  24,  California 


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